Principal Agent Model

There are a great deal of principal agent problems as we have relationship with another people and problems. The principal agent problems can be found in our daily lives and professional field that deals with law, insurance, or more serious problems. I want to start off with my family story first, and then insurance story will be dealt.

Since I was born, my parent live with my father's parent. Grandfather and grandmother live with my parent, my brother, and me. It is mostly peaceful and happy but sometimes there are conflicts between my parent and grandparent. Especially, my mother and grandmother were sometimes having arguments. The arguments are usually from the difference between age groups. My grandmother used to live in the period when woman is ought to take care of all housework, which includes all meals, cleaning, child care, and all other housework are thought to be job for only wife or woman. And husband or man is ought to work for their family, which means making money is their job. However, my mother is a fashion designer. She likes to work globally, reading books to learn new things, and travel to see another world. She loves her job rather than taking care of housework. They live in the opposite world. My grandmother wanted her to come home early as soon as she finishes her work to prepare dinner for family, but my mother wanted to take peaceful rest and read a book after exhausting work days.

 Between them, my father is the one who tried to understand both sides of opinions to resolve the tension. My father was wise. He was entirely supporting mother's work life. He respected her opinion and life as herself to do whatever she has dreamed. He did not want her to give up her job because of him, or any other obstacles. In addition to this, he also respected grandmother's opinion. He truly understood the situation and thoughts of her and tried to persuade her to fade away from old customs. As he put an effort to removing the gap between old and new life customs, the conflicts between my mother and grandmother have been relieved and they respect each other even though they are still subtle things that cannot be agreed on.

In addition, my wife was involved in a car accident during her travel in Jeju island. It was crazy because driver under influence crushed her car even though she was on the right lane to drive. Her car was literally crushed and the car was not usable anymore. It was a serious and urgent situation. There were no family or friends to help her physically right away because she was on a trip and she was far from home.  Therefore, she called an agent to talk about how to deal with this matter. Even though, the post-accident situation is quite systemized, her agent was trying to satisfy her about compensation and any care she wanted. She did not have to talk about the accident details and compensation directly to the person who also involved in an accident. The agent she hired was dealing with all the cost and insurance problems instead of her to resolve the situation as clean as possible. It was also possible because the accident occurred because of the other car, not her.

From daily basis to a car accident situation, principal agent models can be found in our lives frequently. To resolve the problems, the agent should be knowledgeable about someone or situation because he or she is the person who understand the both side of opinions. It needs some professional knowledge, genuine mindset, and logic to resolve the tension.