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the tendency of a person who is imperfectly monitored to engage in dishonest or otherwise undesirable behavior
a person who is performing an act for another person, called a principal
a person for whom another person, called an agent, is performing some act
the tendency for a mix of unobserved attributes to become undesirable from the standpoint of an uninformed party
an action taken by an informed party to reveal private information to an uninformed party
an action taken by an uninformed party to induce an informed party to reveal information
the failure of majority rule to produce transitive preferences for society
Arrow's impossibility theorem
a mathematical result showing that, under certain assumed conditions, there is no scheme for aggregating individual preferences into a valid set of social preferences
median voter theorem
a mathematical result showing that if voters are choosing a point along a line and each voter wants the point closest to his most preferred point, then majority rule will pick the most preferred point of the median voter
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