@inbook{110682a5adde4b7587f81332bc0f4b87,
title = "Epistemics at Work: The Theory of Mind in Principal-Agent Relations",
abstract = "Agency theory studies the impact of and remedies to asymmetrically distributed information in principal-agent relations. Yet, it does so in a surprisingly binary manner: It assumes the principal to be perfectly knowledgeable of some pieces of information (such as the agent{\textquoteright}s risk aversion), while others (such as the agent{\textquoteright}s true effort exerted) are considered to be perfectly private information of the agent. Agency theory thus makes highly asymmetrical assumptions about the knowledge of principals and agents, largely neglecting the role of individual differences in the human capacity to read other people{\textquoteright}s desires, intentions, knowledge, and beliefs—that is, to have an imperfect theory of someone else{\textquoteright}s mind. This study explores the implications of instilling agency theory with a more realistic account of this (bounded) human capacity.",
keywords = "Agency theory, Principal-agent Relationship, Epistemic assumptions, Theory of mind, Cognition, Agency theory, Principal-agent relationship, Epistemic assumptions, Theory of mind, Cognition",
author = "Stefan Linder and Foss, {Nicolai Juul} and Diego Stea",
note = "Published online 3 February 2015",
year = "2017",
doi = "10.1093/oxfordhb/9780199935406.013.8",
language = "English",
isbn = "9780190650230",
series = "Oxford Handbooks in Business and Management",
publisher = "Oxford University Press",
pages = "101--126",
editor = "Hitt, {Michael A.} and Jackson, {Susan E.} and Salvador Carmona and Leonard Bierman and Shalley, {Christina E.} and Wright, {Douglas Michael}",
booktitle = "The Oxford Handbook of Strategy Implementation",
address = "United Kingdom",
}