“We define agency costs as the sum of:
(1) the monitoring expenditures by the principal,
(2) the bonding expenditures by the agent,
(3) the residual loss.
Note also that agency costs arise in any situation involving cooperative effort… by two or more people even though there is no clear cut principal-agent relationship.”

—  Michael Jensen

Source: "Theory of the firm: Managerial behavior, agency costs and ownership structure", 1976, p. 308-9

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Michael Jensen8
American economist 1939

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