The problem of unilateralism in agency theory: towards a bilateral formulation
Some business ethicists view agency theory as a cautionary tale – a proof that it is impossible to carry out successful economic interactions in the absence of ethical behaviour. The cautionary-tale view presents a nuanced normative characterisation of agency, but its unilateral focus betrays a limi...
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| Format: | Article |
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Cambridge University Press
2017
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| Online Access: | https://eprints.nottingham.ac.uk/40438/ |
| _version_ | 1848796056619319296 |
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| author | Pouryousefi, Sareh Frooman, Jeff |
| author_facet | Pouryousefi, Sareh Frooman, Jeff |
| author_sort | Pouryousefi, Sareh |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | Some business ethicists view agency theory as a cautionary tale – a proof that it is impossible to carry out successful economic interactions in the absence of ethical behaviour. The cautionary-tale view presents a nuanced normative characterisation of agency, but its unilateral focus betrays a limited understanding of the structure of social interaction. This article moves beyond unilateralism by presenting a descriptive and normative argument for a bilateral cautionary-tale view. Specifically, we discuss hat swaps and role dualism in asymmetric-information principal-agent relationships and argue that the norm of reciprocity can function as a moral solution to agency risks in adverse-selection and moral-hazard problems. Our novel bilateral cautionary-tale formulation extends the normative boundaries of the asymmetric-information stream of agency theory, while leaving the fundamental economic assumptions of agency theory intact. |
| first_indexed | 2025-11-14T19:41:55Z |
| format | Article |
| id | nottingham-40438 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| last_indexed | 2025-11-14T19:41:55Z |
| publishDate | 2017 |
| publisher | Cambridge University Press |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-404382020-05-04T18:33:16Z https://eprints.nottingham.ac.uk/40438/ The problem of unilateralism in agency theory: towards a bilateral formulation Pouryousefi, Sareh Frooman, Jeff Some business ethicists view agency theory as a cautionary tale – a proof that it is impossible to carry out successful economic interactions in the absence of ethical behaviour. The cautionary-tale view presents a nuanced normative characterisation of agency, but its unilateral focus betrays a limited understanding of the structure of social interaction. This article moves beyond unilateralism by presenting a descriptive and normative argument for a bilateral cautionary-tale view. Specifically, we discuss hat swaps and role dualism in asymmetric-information principal-agent relationships and argue that the norm of reciprocity can function as a moral solution to agency risks in adverse-selection and moral-hazard problems. Our novel bilateral cautionary-tale formulation extends the normative boundaries of the asymmetric-information stream of agency theory, while leaving the fundamental economic assumptions of agency theory intact. Cambridge University Press 2017-02-28 Article PeerReviewed Pouryousefi, Sareh and Frooman, Jeff (2017) The problem of unilateralism in agency theory: towards a bilateral formulation. Business Ethics Quarterly, 27 (2). pp. 163-182. ISSN 2153-3326 agency theory cautionary-tale view bilateral agency asymmetric information reciprocity https://www.cambridge.org/core/journals/business-ethics-quarterly/article/problem-of-unilateralism-in-agency-theory-towards-a-bilateral-formulation/42E4187594F7E37BB4EA743458632DF1 doi:10.1017/beq.2016.77 doi:10.1017/beq.2016.77 |
| spellingShingle | agency theory cautionary-tale view bilateral agency asymmetric information reciprocity Pouryousefi, Sareh Frooman, Jeff The problem of unilateralism in agency theory: towards a bilateral formulation |
| title | The problem of unilateralism in agency theory: towards a bilateral formulation |
| title_full | The problem of unilateralism in agency theory: towards a bilateral formulation |
| title_fullStr | The problem of unilateralism in agency theory: towards a bilateral formulation |
| title_full_unstemmed | The problem of unilateralism in agency theory: towards a bilateral formulation |
| title_short | The problem of unilateralism in agency theory: towards a bilateral formulation |
| title_sort | problem of unilateralism in agency theory: towards a bilateral formulation |
| topic | agency theory cautionary-tale view bilateral agency asymmetric information reciprocity |
| url | https://eprints.nottingham.ac.uk/40438/ https://eprints.nottingham.ac.uk/40438/ https://eprints.nottingham.ac.uk/40438/ |