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In: Economics

MULTI PART QUESTION PART 1 Applying the doctor-patient relationship to that of the Principal-Agent model, the...

MULTI PART QUESTION

PART 1 Applying the doctor-patient relationship to that of the Principal-Agent model, the theory is that

the doctor is the ____________ and the patient is the ___________.

Group of answer choices

principal; agent

principal; principal

agent; agent

agent; principal

none of the above

PART 2

The reason for your answer in number 7 is that

Group of answer choices

doctors can do whatever they want

doctors should act only upon or in response to the specific symptoms and diagnostic findings from tests done only on the patient's relative

doctors should act only upon or in response to the specific symptoms and diagnostic findings from tests done only on the patient

patient should act only upon or in response to the specific symptoms and diagnostic findings from tests done only on the doctor

none of the above

Expert Solution

PART (A)

The doctor is the agent and patient is principal

agent;principal

Reason: The principal (the patient) assign an agent (doctor) to advise the principal in making decisions about treatment. The doctor is expected to be a perfect agent, combining professional knowledge with the patient's preferences to determine a choice that the patient would make based on the particular information. The principal-agent problem arises as the doctor chooses instead to maximize his or her own interests, which in many cases do not align with the patient's interests.

PART (B)

None of the above

Reason: The principal (the patient) assign an agent (doctor) to advise the principal in making decisions about treatment. The doctor is expected to be a perfect agent, combining professional knowledge with the patient's preferences to determine a choice that the patient would make based on the particular information. The principal-agent problem arises as the doctor chooses instead to maximize his or her own interests, which in many cases do not align with the patient's interests.

Rahul Sunny answered 1 year ago

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