Describe how this arrangement has a principal-agent problem

Reference no: EM133465657

Assignment:

Instacart allows an individual who needs groceries (the principal) to hire a personal shopper (the agent) to go to the store and buy their groceries for them. The principal makes a list of grocery items needed. The agent goes to the store, buys those items, and delivers them to the principal.

(1) Suppose that the agent gets paid 10% of the total amount on the receipt. Describe how this arrangement has a principal-agent problem.

(2) Is there a solution to this or at least some way in which this arrangement could be improved to lessen the principal-agent problem? Describe at least one partial solution.

Reference no: EM133465657

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