Han and Greedo Discuss Han’s Bounty (A New Hope)

Jabba the Hutt has placed a bounty on Han Solo’s head “so large [that] every bounty hunter in the galaxy” is looking for him. This caused Greedo, along with presumably many others, to search for Han since the price for him is so high. Han explains that his life should be spared since he has the money that is owed to Jabba. This is an example of the principle-agent problem, as Greedo’s interest is now different than Jabba’s. Greedo tells Han his life will be spared if Greedo receives the money that is meant for Jabba. The Principle Agent Problem is when an employee is incentivized to act in their best self-interest as opposed to the best interest of the firm they are working for. Greedo is now incentivized to take the money from Han (to keep for himself) as opposed to handing him over to Jabba the Hutt (who is the firm in this case). Learn more about Incentives and the Principal-Agent Problem in this clip!

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