Haul- by- You, a “do- it- yourself” moving company, is doing a booming business these days. The reason is that some companies relocating employees are changing the way they reimburse moving expenses. Before the change, moves were very expensive, because the companies paid for everything. Now, the companies pay a fixed amount to the employee, who can keep any savings. Explain this change using agency theory concepts. Also, Haul-by- You offers to reimburse customers for the cost of oil used during the move, while customers have to pay for their own gasoline. Why?
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