Abstract:
The principal-agent (agency) problems in mudarabah contract are severe without
effective delegation of information between the contracting parties. Disclosure of
information by an agent can help to reduce asymmetric information and generate sound
decision by both contracting parties in the financing and securities investment based on
the mudarabah contract. This study will explore the evolutionary learning of the
contracting parties in improving their decision making process. The principal and agent
can make their decisions based on individual learning or social learning (through shura
or mutual consultation) to generate profit. Therefore, the objectives of this study are;
first, to theoretically establish mudarabah contract in Islamic banking model that utilizes
individual learning based on the principal-agent theory.
