Page "Exploitation" Paragraph 14

Other neoclassical theories go beyond simple organizational exploitation.

First, another type of exploiter is the hired " agent " ( employee ) who takes advantage of the " principal " ( employer ) who hires him or her, under conditions of asymmetric information ( see the principal – agent problem ).

For example, a clerk may be able to " shirk " on the job, secretly violating the labor contract.

Similarly, an executive may embezzle funds, which is also contrary to the interests of the stockholders.

This kind of exploitation is beyond the scope of markets, within corporate or governmental bureaucratic organizations.

It is often extremely hard to solve using competition and markets but is instead addressed using monitoring of employees and management, risk-sharing agreements, bonding, and the like.