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It is almost by definition the agency problem. The hotel's agent has their own best interest in mind, rather than the hotel's, and can get co-opted by a small
by mathattack 12y ago
It is almost by definition the agency problem. The hotel's agent has their own best interest in mind, rather than the hotel's, and can get co-opted by a small bribe.
- dpritchett 12y agoExactly! To elaborate, the $20 might not work if the desk clerks were paid twice as much, had benefits, and had occasional meetings with management reminding them not to take tips.
- mathattack 12y agoI agree. There are two paths for the hotelier. 1 - Pay employees a lot better, disallow tips, and make everything "All in" for the customers. 2 - Pay employees slightly better, and take all the discretion out of their jobs.
- opendais 12y agoYes, which is really what ethics is about isn't it? There is the ethical thing...and then there is what allows you to get a greater reward for intentionally forcing the cost of the reward on to a 3rd party.