# kaal:claim:3373393-008

**Claim.** Because of bounded rationality, incomplete foresight, and information asymmetries, it is impossible for principals to contract for every possible action or inaction of the agent so as to induce the agent to act in the principal's best interests.

**Type.** failure  **Support.** argued

**Holds when.**

- where principals and agents face bounded rationality and incomplete foresight

**Source quote.**

> it is impossible for principals to contract for every possible action or inaction of the agent in order to induce the agent to act in the best interests of the principal.

**From.** Wulf A. Kaal, *Blockchain Solutions for Agency Problems in Corporate Governance* (2019), II. Agency Problems in Corporate Governance, page 5

**Cite as.** Wulf A. Kaal, Blockchain Solutions for Agency Problems in Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3373393

**Verify.** sha256 of source PDF `4d1424b9ba9aff8a61bc7a0dddd02cded93785e5843685dde76c07dcdb23961e` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202019%20-%20Blockchain%20Solutions%20for%20Agency%20Problems%20in%20Corporate%20Governance.pdf

**Failure mode.** incomplete-contracting  (family: agency-cost-and-managerial-opportunism)

**Topics.** risk-and-incentives, disclosure

**Keywords.** agency-theory, incomplete-contracts, bounded-rationality, information-asymmetry

**Related claims.**

- restated_by: https://wulfkaal.github.io/claims/3808852-009
- extends: https://wulfkaal.github.io/claims/2992962-030

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.