Economic Analysis of Agency Law – Episode 9: Managing Conflict

In Episode 9, Professor Seth C. Oranburg tackles one of the thorniest challenges in agency relationships: competing interests. Delegation is meant to align the goals of principals and agents, yet conflicts often arise—whether between a bold, entrepreneurial agent and a cautious counterpart or among multiple agents with divergent priorities. Using the vivid metaphor of Hotch Hotch, where the mayor must choose between Fox and Sox’s ambitious proposal to expand the hive and Horton’s conservative vision for sustainable growth, Professor Oranburg demonstrates how such clashes can disrupt even the most well-designed systems. He explores key concepts of principal-agent and agent-agent conflicts, and offers practical strategies—such as fostering open dialogue, aligning incentives, and delegating conflict resolution—to balance innovation with stability. Tune in to discover how thoughtful management of competing interests can reduce inefficiencies, foster collaboration, and sustain trust in agency relationships.

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