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Agency conflicts arise when there's a divergence of interests between principals (owners) and agents (managers). Common types include conflicts of interest, where managers prioritize personal benefits over shareholder value, and risk aversion, where managers avoid risky but potentially profitable projects. Additionally, there can be conflicts related to the consumption of perks, where managers indulge in excessive benefits at the expense of the company's resources. Addressing these conflicts often requires mechanisms like performance-based incentives or oversight.

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