What Is the Principal-Agent Problem and Why It Matters
Correction Concepts

What Is the Principal-Agent Problem and Why It Matters

Corrected by Emir Baycan · on When Notes Fly · 11 July 2026 · View published page ↗

The principal-agent problem occurs when someone acts on your behalf but has different incentives.

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estimated that the cost of defensive medicine in the United States was approximately $55.6 billion per year
+estimated that total annual medical liability costs in the United States were approximately $55.6 billion per year, of which defen…

Why this is better

Mello et al. (2010) put total medical liability costs at approximately $55.6 billion, of which defensive medicine specifically accounted for about $45.6 billion of that total, not the full $55.6 billion. Verified the live article body already reflects the corrected breakdown. The faq field does not mention Mello or these dollar figures at all, so no secondary fix was needed there.

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