Economics and Scarcity

Paper Summary:

The following paper examines the affect of economic agent behavior on scarcity. It defines market fundamentalism and economic agent behavior. The writer also examines what the best outcome is for society and for the consumer. This paper looks at whether the consumer's best interest is satisfied by the market. All the above are discussed with reference to the economic theory of self-interest, opportunistic behavior, and the "economic person".

From the Paper:

"The development of agent theory in economics is based on assumptions and its impetus that the interests of owners and managers of publicly held corporations may diverge (Wright 295). Sometimes the wishes of stockholders are distorted in favor of the managers of the businesses. The reasoning behind this is that the national economy might suffer if the managers of the firm appeared to be economically predisposed, selfish, and opportunistic. "Our contention is that agency theory's assumptions of self-serving individuals who are primarily economically oriented and predisposed to opportunism, when applied to a firm, it may be incompatible with that firm's achievement of competitive advantage" (Wright 295). Thus, they do not supply the best interests of the stockholders."

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