Suppose you are considering renting an "apartment. You, the renter, can be viewed as an...
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Suppose you are considering renting an "apartment. You, the renter, can be viewed as an agent while the company that owns the apartment can be viewed as the principal. What agency conflicts do you anticipate? Suppose, instead, that you work for the apartment company. What features would you put into the lease agreement that would give the renter incentives to take good care of the apartment?
The will not take the same care of the apartment as the because the does not share in the costs of fixing damage to the apartment. To mitigate this problem, having the pay a deposit would motivate the to keep damages to a minimum. The deposit forces the to share in the costs of fixing any problems that are caused by the Select from the dropdown menus.
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