Residual claimant

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In economics, the residual claimant is the agent who receives the net income (income after deducting all costs).

Residual claimancy is generally required in order for there to be moral hazard, which is a problem typical of information asymmetry. This is specifically the case for the principal–agent problem.[1][2]

In 1875 Walker introduced this wage theory. According to him after paying all the expenses and withdrawing profit from the company, remaining leftover will be distributed to the worker.

Wage=Total Production-(Tax+Interest+profit)

References[edit]

  1. ^ Bowles, Samuel (2004) Microeconomics: Behavior, Institutions and Evolution, Russell Sage Foundation, New York
  2. ^ Samuel Bowles and Herbert Gintis, Mutual Monitoring in Teams: The Effects of Residual Claimancy and Reciprocity.