Economic Analysis of Agency Law – Episode 6: Trust & Reputation

In Episode 6 of Season 3, Professor Seth C. Oranburg explores the powerful yet fragile roles of trust and reputation in agency relationships. He explains how these intangible assets act as the “invisible glue” that holds delegation together—reducing transaction costs, fostering efficiency, and enabling agents to operate with greater autonomy. Drawing on the whimsical tale of Hotch Hotch, where the mayor launches a town-wide reputation building program (complete with the coveted Golden Watcher Award), Professor Oranburg illustrates how consistent behavior, transparency, and accountability can rebuild trust even after severe breaches occur. Tune in to discover why trust and reputation are essential for sustaining efficient agency relationships, and how their proper management creates a resilient environment for delegation in both business and everyday life.