The oil well Maconda exploded in the Gulf of Mexico in 2010, killing 11 people and creating a huge oil spill. BP did not own the Deepwater Horizon platform, but leased it from a company called Transocean. In what sense is this a principal-agent problem? What incentives are created by the problem?
Answer to relevant QuestionsIt is said that the current generation of workers will have a very small probability of being employed by the same firm throughout their work life. In previous generations it was common for people to have just one employer. ...Under what conditions are the two strategies of low cost and high quality a tradeoff? Under what conditions would the efficient frontier not be an appropriate picture of the two strategies?Here are some examples of strategies selected by different firms:1) grow larger – AHERF2) downsize – Avon, Sara Lee3) Diversify – Walmart, PepsiCo4) Dominate a niche – Starbucks, Jiffy Lube5) Outsource production – ...Two firms are involved in developing a new technology that will allow consumers to provide the most incredibly clear picture yet devised on all video sources. Given the risks, compatibility of the technologies is very ...List 3 reasons that firms exist. Do any of the reasons imply that the command and control of centrally planned economies is the appropriate form? What are the similarities and differences between firms and centrally planned ...
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