# Agency cost

`kaal:entity:agency-cost`

**Status.** derived

This node is assembled mechanically from the 4 claims that carry the concept tag `agency-cost`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself.

## Every claim under this term

4 claims across 2 works, 2012 to 2019.

**2012**

- [2097160-010](https://wulfkaal.github.io/claims/2097160-010) [failure/argued] *(failure mode)* -- Because the Barclays award falls away rather than converting, it does not create a fixed claim giving managers a stake in the firm's liquidation value, and therefore it does not lower agency cost.
  > it does not create a fixed claim for managers with a stake in the firm's liquidation value because it falls away when converted.141 Barclays's CCA, therefore, also does not lower agency cost.
  Wulf A. Kaal, Contingent Capital in Executive Compensation (2012). SSRN: https://ssrn.com/abstract=2097160
- [2097160-032](https://wulfkaal.github.io/claims/2097160-032) [failure/argued] *(failure mode)* -- The governance benefits of traditional inside debt, incentive optimization and reduced agency costs, all depend on the entity remaining solvent, and inside debt supplies no mechanism of its own to ensure that solvency.
  > value and the associated governance benefits215 incentive optimization216 and reduction of agency costs217 depend on the solvency of the respective entity. Inside debt without a conversion feature provides no mechanism to ensure the solvency of the entity.
  Wulf A. Kaal, Contingent Capital in Executive Compensation (2012). SSRN: https://ssrn.com/abstract=2097160

**2019**

- [3441904-003](https://wulfkaal.github.io/claims/3441904-003) [mechanism/argued] -- Because blockchain guarantees prevent any participant from circumventing the coded set of governance rules, a lower level of oversight and monitoring of agents is needed, which changes the cost structure of the principal agent relationship.
  > Hence, in the blockchain infrastructure, a lower level of oversight and monitoring of agents changes the cost structure of the principal agent relationship.
  Wulf A. Kaal, Blockchain-Based Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3441904
- [3441904-006](https://wulfkaal.github.io/claims/3441904-006) [condition/argued] *(failure mode)* -- Without evolutionary governance upgrades to blockchain protocols, the cost reduction that blockchain brings to the agency relationship cannot be maintained.
  > Without evolutionary governance upgrades the cost reduction for the agency relationship cannot be maintained.
  Wulf A. Kaal, Blockchain-Based Corporate Governance (2019). SSRN: https://ssrn.com/abstract=3441904

## Verify

Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust.

    curl -s https://wulfkaal.github.io/entities/agency-cost.md | sha256sum

**Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.