Professor Jones has just been hired by the economics department at a major university

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Professor Jones has just been hired by the economics department at a major university. The president of the board of regents has stated that the university is committed to providing top-quality education for undergraduates. Two months into the semester, Jones fails to show up for his classes. It seems he is devoting all his time to research rather than teaching. Jones argues that his research will bring prestige to the department and the university. Should he be allowed to continue with research? Discuss with reference to the principal-agent problem.

Professor Jones should

A. be allowed to continue because he is an agent who is unable to get the principals, who are his students, to work hard.

B. not be allowed to continue because he is an agent following his own interests rather than the interests of the principal (university) who hired him.

C. be allowed to continue because the principal (university) who hired him is paying Jones, who is an agent, an efficiency wage.

D. not be allowed to continue because he and the university who hired him are principals who underestimate the value of teaching.

E. not be allowed to continue because he is an agent with less information about the value of teaching than the principal (university) who hired him.