Principals and Agents

In the context of General Knowledge, "principals" and "agents" refer to two parties involved in a decision-making process. The principal is the individual or entity that delegates authority to another, while the agent acts on behalf of the principal. For example, in business, a company (principal) may hire an employee (agent) to carry out tasks or make decisions. The agent's actions should align with the principal's interests, but conflicts can arise if the agent prioritizes personal goals over those of the principal. Understanding this relationship helps clarify dynamics in various professional and personal situations.