Michael Jensen developed some of the seminal ideas underlying agency theory. He suggests that at the time the market value of Enron peaked at approximately $70 billion, its intrinsic value was approximately $30 billion. He describes Enron as having been “a good, viable business” and “a major innovator.” In this respect, he asserts that its senior managers’ attempt to defend the stock’s $40 billion of overvaluation was a mistake that effectively destroyed $30 billion of intrinsic value. He notes that Enron’s executives faced a choice. On the one hand, they could have worked to help the market lower its expectations of the company. On the other hand, they could have tried to use accounting manipulations to fool the market. In this respect, Jensen asserts, Enron’s managers gambled with their critical asset, the firm’s reputation for integrity. Discuss the psychological issues associated with Enron’s decision task, as described by Jensen.