In this paper,we propose an iterative algorithm to find the optimal incentive mechanism for the principal-agent problem under moral hazard where the number of agent action profiles is infinite,and where there are an i...In this paper,we propose an iterative algorithm to find the optimal incentive mechanism for the principal-agent problem under moral hazard where the number of agent action profiles is infinite,and where there are an infinite number of results that can be observed by the principal.This principal-agent problem has an infinite number of incentive-compatibility constraints,and we transform it into an optimization problem with an infinite number of constraints called a semi-infinite programming problem.We then propose an exterior penalty function method to find the optimal solution to this semi-infinite programming and illustrate the convergence of this algorithm.By analyzing the optimal solution obtained by the proposed penalty function method,we can obtain the optimal incentive mechanism for the principal-agent problem with an infinite number of incentive-compatibility constraints under moral hazard.展开更多
The urban transit fare structure and level can largely affect passengers’travel behavior and route choices.The commonly used transit fare policies in the present transit network would lead to the unbalanced transit a...The urban transit fare structure and level can largely affect passengers’travel behavior and route choices.The commonly used transit fare policies in the present transit network would lead to the unbalanced transit assignment and improper transit resources distribution.In order to distribute transit passenger flow evenly and efficiently,this paper introduces a new distance-based fare pattern with Euclidean distance.A bi-level programming model is developed for determining the optimal distance-based fare pattern,with the path-based stochastic transit assignment(STA)problem with elastic demand being proposed at the lower level.The upper-level intends to address a principal-agent game between transport authorities and transit enterprises pursing maximization of social welfare and financial interest,respectively.A genetic algorithm(GA)is implemented to solve the bi-level model,which is verified by a numerical example to illustrate that the proposed nonlinear distance-based fare pattern presents a better financial performance and distribution effect than other fare structures.展开更多
The optimization investment policy decision of SCM-Supply Chain Management-implementation has been analysed under symmetric and asymmetric information conditions. For both conditions, SCM implementation options’ deci...The optimization investment policy decision of SCM-Supply Chain Management-implementation has been analysed under symmetric and asymmetric information conditions. For both conditions, SCM implementation options’ decision optimizing models have been developed. In these models, both clients and vendors try to pursue their own benefits. Based upon the principal-agent theory, the models show to what extent a principal (a client) needs to pay more to an agent (a vendor) in a context of asymmetric information. For the client, it is important to understand the extra costs to be able to adopt effective strategies to stimulate a vendor to perform an optimal implementation of a SCM system. The results of a simulation experiment regarding SCM implementation options illustrate and verify the theoretical findings and confirm the general notion that the less informed party is obliged to pay information rent to the better-informed party.展开更多
Based on principal-agent theory,this paper establishes an incentive contract mechanism between government and NPO under asymmetric information,and analyzes the impact of absolute risk aversion and output level on the ...Based on principal-agent theory,this paper establishes an incentive contract mechanism between government and NPO under asymmetric information,and analyzes the impact of absolute risk aversion and output level on the expected utility of government,NPO and society.Research shows that risk aversion is negatively correlated with the expected utility of government,NPO and society.The output coefficient is positively correlated with the expected utility of government,NPO and society.Reducing absolute risk aversion,increasing output coefficient and increasing government incentives can effectively motivate NPO to actively participate in social rescue activities.展开更多
Public authorities frequently mandate public or private agencies to manage their renewable natural resources.Contrary to the agency,which is an expert in renewable natural resource management,public authorities usuall...Public authorities frequently mandate public or private agencies to manage their renewable natural resources.Contrary to the agency,which is an expert in renewable natural resource management,public authorities usually ignore the sustainable level of harvest.In this note,we first model the contractual relationship between a principal,who owns the renewable natural resource,and an agent,who holds private information on its sustainable level of harvest.We then look for the Pareto-optimal allocations.In the situation of an imperfect information setting,we find that the Pareto-optimal contracting depends on the probability that the harvesting level stands outside the sustainability interval.The information rent held by the agent turns out to be unavoidable,such that stepping outside the sustainability interval implies the possibility of depletion of the renewable natural resource.This,in turn,compromises the maintenance of the ecological balance in natural ecosystems.展开更多
The advent of Industry 4.0 has compelled businesses to adopt digital approaches that combine software toenhance production efficiency. In this rapidly evolving market, software development is an ongoing process thatmu...The advent of Industry 4.0 has compelled businesses to adopt digital approaches that combine software toenhance production efficiency. In this rapidly evolving market, software development is an ongoing process thatmust be tailored to meet the dynamic needs of enterprises. However, internal research and development can beprohibitively expensive, driving many enterprises to outsource software development and upgrades to externalservice providers. This paper presents a software upgrade outsourcing model for enterprises and service providersthat accounts for the impact of market fluctuations on software adaptability. To mitigate the risk of adverseselection due to asymmetric information about the service provider’s cost and asymmetric information aboutthe enterprise’s revenues, we propose pay-per-time and revenue-sharing contracts in two distinct informationasymmetry scenarios. These two contracts specify the time and transfer payments for software upgrades. Througha comparative analysis of the optimal solutions under the two contracts and centralized decision-making withfull-information, we examine the characteristics of the solutions under two information asymmetry scenarios andanalyze the incentive effects of the two contracts on the various stakeholders. Overall, our study offers valuableinsights for firms seeking to optimize their outsourcing strategies and maximize their returns on investment insoftware upgrades.展开更多
In inventory financing,asymmetric information between banks and the third party logistics enterprises may incur moral risks,often causing economic losses of banks.To effectively solve this problem,a pure incentive sch...In inventory financing,asymmetric information between banks and the third party logistics enterprises may incur moral risks,often causing economic losses of banks.To effectively solve this problem,a pure incentive scheme and a regulatory incentive scheme are designed with the principal-agent theory.By comparison,it is found that the pure incentive model is not applicable to practical conditions,and regulatory incentive model can not only solve practical problems substantially but also outbalance pure incentive model under certain conditions.The research results from example analysis given in this paper offer theoretical instruction and a practical method for effective regulation of banks.展开更多
Both conflict and asymmetric information exist betweenthe telecom operators and the service provider,and result in illegal behaviors of the service provider.The relationship between the telecom operators andthe servic...Both conflict and asymmetric information exist betweenthe telecom operators and the service provider,and result in illegal behaviors of the service provider.The relationship between the telecom operators andthe service provider is classical multi-task principalagentrelationship. The multi-task incentive for theservice provider is considered in the design of theprincipal-agent incentive contract, and it is necessaryto add the multi-task incentive to the serviceproviders through the analysis of the risk costs andthe agency costs of this problem.展开更多
Under the Knightian uncertainty,this paper constructs the optimal principal(he)-agent(she)contract model based on the principal’s expected profit and the agent’s expected utility function by using the sublinear expe...Under the Knightian uncertainty,this paper constructs the optimal principal(he)-agent(she)contract model based on the principal’s expected profit and the agent’s expected utility function by using the sublinear expectation theory.The output process in the model is provided by the agent’s continuous efforts and the principal cannot directly observe the agent’s efforts.In the process of work,risk-averse agent will have the opportunity to make external choices.In order to promote the agent’s continuous efforts,the principal will continuously provide the agents with consumption according to the observable output process after the probation period.In this paper,the Hamilton–Jacobi–Bellman equation is deduced by using the optimality principle under sublinear expectation while the smoothness viscosity condition of the principal-agent optimal contract is given.Moreover,the continuation value of the agent is taken as the state variable to characterize the optimal expected profit of the principal,the agent’s effort and the consumption level under different degrees of Knightian uncertainty.Finally,the behavioral economics is used to analyze the simulation results.The research findings are that the increasing Knightian uncertainty incurs the decline of the principal’s maximum profit;within the probation period,the increasing Knightian uncertainty leads to the shortening of probation period and makes the agent give higher effort when she faces the outside option;what’s more,after the smooth completion of the probation period for the agent,the agent’s consumption level will rise and her effort level will drop as Knightian uncertainty increasing.展开更多
Key to energize State-Owned-Enterprises (hereinafter SOEs) is to set up effective incentive and discipline mechanisms. First of all, the paper analyses the problems existing in the current incentive and discipline mec...Key to energize State-Owned-Enterprises (hereinafter SOEs) is to set up effective incentive and discipline mechanisms. First of all, the paper analyses the problems existing in the current incentive and discipline mechanism system in SOEs, including low transparency income and considerable covert income, insider control,corporate governance nominalization and so on; next,the paper explores the causes behind these problems,such as incomplete corporate governance and imperfect market mechanism; finally, the paper proposes a series of solutions from the aspects of incentive mechanism and discipline mechanism.展开更多
Grassland resource governance is an important part of ecological civilization construction,and it directly af‐fects grassland governance performance.This study deploys principal-agent theory and uses social network a...Grassland resource governance is an important part of ecological civilization construction,and it directly af‐fects grassland governance performance.This study deploys principal-agent theory and uses social network analysis to compare grassland resource governance modes in China in terms of institutional settings and insti‐tutional network characteristics.This study found three types of grassland resource governance modes:self-designed,docked,and integrated.The self-designed mode forms a network structure with dual centers and multiple members,and has the second-best structural mode of the three types.The docked mode forms a net‐work structure with a single center in which the institution is the absolute core and is relatively divergent.It has the weakest structural advantage of the three types.The integrated mode forms a network structure with a single institution at the core and other institutions distributed evenly throughout the structure.This mode has the strongest structural advantage among the three types.This study offers the practical application of improv‐ing the practice of grassland governance in China and is theoretically significant because it can contribute to improving grassland governance modes and enriching the public goods resources governance.展开更多
Traditional Chinese medicine(TCM)has been improving human health for millennia.And for that,it has gradually gained the attention of the global scientific community.TCM clinical research progresses,but slowly.I see it...Traditional Chinese medicine(TCM)has been improving human health for millennia.And for that,it has gradually gained the attention of the global scientific community.TCM clinical research progresses,but slowly.I see it as being held back by perverse incentive structures in science and regulatory politics.展开更多
With respect to different risk preference of an agent in a supply chain, linear-contract models are designed according to the principal-agent theory. The study shows that the risk preference of an agent directly corre...With respect to different risk preference of an agent in a supply chain, linear-contract models are designed according to the principal-agent theory. The study shows that the risk preference of an agent directly correlates with the incentive compensation coefficient of principal, order quantity of principal and production capability level of the agent. The principal should offer an appropriate incentive contract according to the risk preference of the agent, or choose an agent holding a different risk preference to establish the supply chain.展开更多
In the organizational setting of marine engineering,a significant number of information security incidents have been arised from the employees’failure to comply with the information security policies(ISPs).This may b...In the organizational setting of marine engineering,a significant number of information security incidents have been arised from the employees’failure to comply with the information security policies(ISPs).This may be treated as a principal-agent problem with moral hazard between the employer and the employee for the practical compliance effort of an employee is not observable without high cost-.On the other hand,according to the deterrence theory,the employer and the employee are inherently self-interested beings.It is worth examining to what extent the employee is self-interested in the marine ISPs compliance context.Moreover,it is important to clarify the proper degree of severity of punishment in terms of the deterrent effect.In this study,a marine ISPs compliance game model has been proposed to evaluate the deterrence effect of punishment on the non-compliance behavior of employee individuals.It is found that in a non-punishment contract,the employee will decline to comply with the marine ISPs;but in a punishment contract,appropriate punishment will lead her to select the marine ISPs compliance effort level expected by the employer,and cause no potential backfire effect.展开更多
We consider a general framework of optimal contract design under the heterogeneity and short-termism of agents.Our research shows that the optimal contract must weigh the agent's information rent,incentive cost,an...We consider a general framework of optimal contract design under the heterogeneity and short-termism of agents.Our research shows that the optimal contract must weigh the agent's information rent,incentive cost,and benefit to overcome the contract's adverse selection and moral hazards.Agents with higher moral levels were more likely to choose higher effort and lower manipulation.Simultaneously,the principal offers lower incentives and receives more significant payoff.We also extend our model to investigate the benefits of Bayesian learning.Furthermore,we compare the principal's returns in general and learning models and find that the learning contract can bring more profit to the principal。展开更多
Based on game theory and principal-agent theory, this paper focuses on how to control product quality and design quality contract in supply chain when moral hazard exists. We set up the supplier and buyer's expected ...Based on game theory and principal-agent theory, this paper focuses on how to control product quality and design quality contract in supply chain when moral hazard exists. We set up the supplier and buyer's expected profits function model, in which the supplier makes production process investment-level decision and decides on the product quality prevention level, whereas the buyer makes quality evaluation decision and decides on the product quality inspection level. The supplier with a moral hazard of reducing investment level may lack investment in the production process; thus, the buyer will pay the information rent to incentivize the supplier to improve the investment level. The buyer creates the moral hazard of exaggerating the product quality defective rate, who may overinvest in the inspection process. We use the optimal condition to solve supplier's first-best investment level, product quality prevention level, and buyer's first-best quality inspection level, internal penalty, and apportionment ratio of external failure cost. We also conduct a simulation test that shows the following: When the supplier improves its investment level, its product quality prevention level will increase, and the buyer's quality inspection level will decrease. With the improvement in the buyer's product quality inspection level, its internal penalty will increase, and the supplier's external failure cost will also increase while its expected profits will decrease. Hence, the buyer will design an incentive contract, the expected profits of which will increase, and the whole supply chain's joint expected profits function may become an inverse U shape. Finally, we develop a simulation example and propose suggestions for quality control strategy and contract design in the supply chain under the conditions of asymmetric information.展开更多
INTRODUCTIONHart once proposed in his book "corporate governance": Some theory and implications that governance issue would emerge if there is any interest conflict between principal and agent with no support of a ...INTRODUCTIONHart once proposed in his book "corporate governance": Some theory and implications that governance issue would emerge if there is any interest conflict between principal and agent with no support of a complete contract in a principal-agent relation. Governance theory developed from the governance issue believes that an effective institutional arrangement could avoid or decrease the occurrence of these issues and force the agent to maxilnize his principal's interest.展开更多
The optimization investment policy decision of SCM-supply chain management-implementation has been analysed under symmetric and asymmetric information conditions.For both conditions,SCM implementation optional decisio...The optimization investment policy decision of SCM-supply chain management-implementation has been analysed under symmetric and asymmetric information conditions.For both conditions,SCM implementation optional decision optimizing models have been developed.In these models,both clients and vendors try to pursue their own benefits.Based upon the principal-agent theory,the models show to what extent a principal(a client)needs to pay more to an agent(a vendor)in a context of asymmetric information.For the client it is important to understand the extra costs to be able to adopt effective strategies to stimulate a vendor to perform an optimal implementation of a SCM system.The results of a simulation experiment regarding SCM implementation options illustrate and verify the theoretical findings and confirm the general notion that the less informed party is obliged to pay information rent to the better-informed party.展开更多
This paper studies the problem of principal-agent with moral hazard in continuous time.The firm’s cash flow is described by geometric Brownian motion(hereafter GBM).The agent affects the drift of the firm’s cash flo...This paper studies the problem of principal-agent with moral hazard in continuous time.The firm’s cash flow is described by geometric Brownian motion(hereafter GBM).The agent affects the drift of the firm’s cash flow by her hidden effort.Meanwhile,the firm rewards the agent with corresponding compensation and equity which depend on the output.The model extends dynamic optimal contract theory to an inflation environment.Firstly,the authors obtain the dynamic equation of the firm’s real cash flow under inflation by using the It?formula.Then,the authors use the martingale representation theorem to obtain agent’s continuation value process.Moreover,the authors derive the Hamilton-Jacobi-Bellman(HJB)equation of investor’s value process,from which the authors derive the investors’scaled value function by solving the second-order ordinary differential equation.Comparing with He;,the authors find that inflation risk affects the agent’s optimal compensation depending on the firm’s position in the market.展开更多
基金supported by National Natural Science Foundation of China(72031009 and 71871171)the National Social Science Foundation of China(20&ZD058).
文摘In this paper,we propose an iterative algorithm to find the optimal incentive mechanism for the principal-agent problem under moral hazard where the number of agent action profiles is infinite,and where there are an infinite number of results that can be observed by the principal.This principal-agent problem has an infinite number of incentive-compatibility constraints,and we transform it into an optimization problem with an infinite number of constraints called a semi-infinite programming problem.We then propose an exterior penalty function method to find the optimal solution to this semi-infinite programming and illustrate the convergence of this algorithm.By analyzing the optimal solution obtained by the proposed penalty function method,we can obtain the optimal incentive mechanism for the principal-agent problem with an infinite number of incentive-compatibility constraints under moral hazard.
基金the Humanities and Social Science Foundation of the Ministry of Education of China(Grant No.20YJCZH121).
文摘The urban transit fare structure and level can largely affect passengers’travel behavior and route choices.The commonly used transit fare policies in the present transit network would lead to the unbalanced transit assignment and improper transit resources distribution.In order to distribute transit passenger flow evenly and efficiently,this paper introduces a new distance-based fare pattern with Euclidean distance.A bi-level programming model is developed for determining the optimal distance-based fare pattern,with the path-based stochastic transit assignment(STA)problem with elastic demand being proposed at the lower level.The upper-level intends to address a principal-agent game between transport authorities and transit enterprises pursing maximization of social welfare and financial interest,respectively.A genetic algorithm(GA)is implemented to solve the bi-level model,which is verified by a numerical example to illustrate that the proposed nonlinear distance-based fare pattern presents a better financial performance and distribution effect than other fare structures.
文摘The optimization investment policy decision of SCM-Supply Chain Management-implementation has been analysed under symmetric and asymmetric information conditions. For both conditions, SCM implementation options’ decision optimizing models have been developed. In these models, both clients and vendors try to pursue their own benefits. Based upon the principal-agent theory, the models show to what extent a principal (a client) needs to pay more to an agent (a vendor) in a context of asymmetric information. For the client, it is important to understand the extra costs to be able to adopt effective strategies to stimulate a vendor to perform an optimal implementation of a SCM system. The results of a simulation experiment regarding SCM implementation options illustrate and verify the theoretical findings and confirm the general notion that the less informed party is obliged to pay information rent to the better-informed party.
文摘Based on principal-agent theory,this paper establishes an incentive contract mechanism between government and NPO under asymmetric information,and analyzes the impact of absolute risk aversion and output level on the expected utility of government,NPO and society.Research shows that risk aversion is negatively correlated with the expected utility of government,NPO and society.The output coefficient is positively correlated with the expected utility of government,NPO and society.Reducing absolute risk aversion,increasing output coefficient and increasing government incentives can effectively motivate NPO to actively participate in social rescue activities.
基金financially supported by a grant overseen by the French National Forestry Office through the Forests for Tomorrow International Teaching and Research Chair(Convention particulière n°1/2013)supported by the French National Research Agency through the Laboratory of Excellence ARBRE,a part of the Investments for the Future Program(ANR 11--LABX-0002-01).
文摘Public authorities frequently mandate public or private agencies to manage their renewable natural resources.Contrary to the agency,which is an expert in renewable natural resource management,public authorities usually ignore the sustainable level of harvest.In this note,we first model the contractual relationship between a principal,who owns the renewable natural resource,and an agent,who holds private information on its sustainable level of harvest.We then look for the Pareto-optimal allocations.In the situation of an imperfect information setting,we find that the Pareto-optimal contracting depends on the probability that the harvesting level stands outside the sustainability interval.The information rent held by the agent turns out to be unavoidable,such that stepping outside the sustainability interval implies the possibility of depletion of the renewable natural resource.This,in turn,compromises the maintenance of the ecological balance in natural ecosystems.
文摘The advent of Industry 4.0 has compelled businesses to adopt digital approaches that combine software toenhance production efficiency. In this rapidly evolving market, software development is an ongoing process thatmust be tailored to meet the dynamic needs of enterprises. However, internal research and development can beprohibitively expensive, driving many enterprises to outsource software development and upgrades to externalservice providers. This paper presents a software upgrade outsourcing model for enterprises and service providersthat accounts for the impact of market fluctuations on software adaptability. To mitigate the risk of adverseselection due to asymmetric information about the service provider’s cost and asymmetric information aboutthe enterprise’s revenues, we propose pay-per-time and revenue-sharing contracts in two distinct informationasymmetry scenarios. These two contracts specify the time and transfer payments for software upgrades. Througha comparative analysis of the optimal solutions under the two contracts and centralized decision-making withfull-information, we examine the characteristics of the solutions under two information asymmetry scenarios andanalyze the incentive effects of the two contracts on the various stakeholders. Overall, our study offers valuableinsights for firms seeking to optimize their outsourcing strategies and maximize their returns on investment insoftware upgrades.
文摘In inventory financing,asymmetric information between banks and the third party logistics enterprises may incur moral risks,often causing economic losses of banks.To effectively solve this problem,a pure incentive scheme and a regulatory incentive scheme are designed with the principal-agent theory.By comparison,it is found that the pure incentive model is not applicable to practical conditions,and regulatory incentive model can not only solve practical problems substantially but also outbalance pure incentive model under certain conditions.The research results from example analysis given in this paper offer theoretical instruction and a practical method for effective regulation of banks.
文摘Both conflict and asymmetric information exist betweenthe telecom operators and the service provider,and result in illegal behaviors of the service provider.The relationship between the telecom operators andthe service provider is classical multi-task principalagentrelationship. The multi-task incentive for theservice provider is considered in the design of theprincipal-agent incentive contract, and it is necessaryto add the multi-task incentive to the serviceproviders through the analysis of the risk costs andthe agency costs of this problem.
基金This research was supported by the National Natural Science Foundation of China(No.71571001).
文摘Under the Knightian uncertainty,this paper constructs the optimal principal(he)-agent(she)contract model based on the principal’s expected profit and the agent’s expected utility function by using the sublinear expectation theory.The output process in the model is provided by the agent’s continuous efforts and the principal cannot directly observe the agent’s efforts.In the process of work,risk-averse agent will have the opportunity to make external choices.In order to promote the agent’s continuous efforts,the principal will continuously provide the agents with consumption according to the observable output process after the probation period.In this paper,the Hamilton–Jacobi–Bellman equation is deduced by using the optimality principle under sublinear expectation while the smoothness viscosity condition of the principal-agent optimal contract is given.Moreover,the continuation value of the agent is taken as the state variable to characterize the optimal expected profit of the principal,the agent’s effort and the consumption level under different degrees of Knightian uncertainty.Finally,the behavioral economics is used to analyze the simulation results.The research findings are that the increasing Knightian uncertainty incurs the decline of the principal’s maximum profit;within the probation period,the increasing Knightian uncertainty leads to the shortening of probation period and makes the agent give higher effort when she faces the outside option;what’s more,after the smooth completion of the probation period for the agent,the agent’s consumption level will rise and her effort level will drop as Knightian uncertainty increasing.
文摘Key to energize State-Owned-Enterprises (hereinafter SOEs) is to set up effective incentive and discipline mechanisms. First of all, the paper analyses the problems existing in the current incentive and discipline mechanism system in SOEs, including low transparency income and considerable covert income, insider control,corporate governance nominalization and so on; next,the paper explores the causes behind these problems,such as incomplete corporate governance and imperfect market mechanism; finally, the paper proposes a series of solutions from the aspects of incentive mechanism and discipline mechanism.
基金This research was funded by the Ministry of Education in China’s Project of Humanities and Social Sciences[Grant number:21YJC630004]the China Postdoctoral Science Foundation[Grant number:2021M691739].
文摘Grassland resource governance is an important part of ecological civilization construction,and it directly af‐fects grassland governance performance.This study deploys principal-agent theory and uses social network analysis to compare grassland resource governance modes in China in terms of institutional settings and insti‐tutional network characteristics.This study found three types of grassland resource governance modes:self-designed,docked,and integrated.The self-designed mode forms a network structure with dual centers and multiple members,and has the second-best structural mode of the three types.The docked mode forms a net‐work structure with a single center in which the institution is the absolute core and is relatively divergent.It has the weakest structural advantage of the three types.The integrated mode forms a network structure with a single institution at the core and other institutions distributed evenly throughout the structure.This mode has the strongest structural advantage among the three types.This study offers the practical application of improv‐ing the practice of grassland governance in China and is theoretically significant because it can contribute to improving grassland governance modes and enriching the public goods resources governance.
文摘Traditional Chinese medicine(TCM)has been improving human health for millennia.And for that,it has gradually gained the attention of the global scientific community.TCM clinical research progresses,but slowly.I see it as being held back by perverse incentive structures in science and regulatory politics.
基金The paper is supported by National Natural Science Foundation of China under Grant No60372085,60404011the Youth Foundation of Northwestern Polytechnical University
文摘With respect to different risk preference of an agent in a supply chain, linear-contract models are designed according to the principal-agent theory. The study shows that the risk preference of an agent directly correlates with the incentive compensation coefficient of principal, order quantity of principal and production capability level of the agent. The principal should offer an appropriate incentive contract according to the risk preference of the agent, or choose an agent holding a different risk preference to establish the supply chain.
基金funded in part by the National Natural Science Foundation of China (No.70972058,No.71272092 and No.71431002)。
文摘In the organizational setting of marine engineering,a significant number of information security incidents have been arised from the employees’failure to comply with the information security policies(ISPs).This may be treated as a principal-agent problem with moral hazard between the employer and the employee for the practical compliance effort of an employee is not observable without high cost-.On the other hand,according to the deterrence theory,the employer and the employee are inherently self-interested beings.It is worth examining to what extent the employee is self-interested in the marine ISPs compliance context.Moreover,it is important to clarify the proper degree of severity of punishment in terms of the deterrent effect.In this study,a marine ISPs compliance game model has been proposed to evaluate the deterrence effect of punishment on the non-compliance behavior of employee individuals.It is found that in a non-punishment contract,the employee will decline to comply with the marine ISPs;but in a punishment contract,appropriate punishment will lead her to select the marine ISPs compliance effort level expected by the employer,and cause no potential backfire effect.
基金supported by the National Natural Science Foundation of China(Grant numbers:71701164,71671142,and 72271249).
文摘We consider a general framework of optimal contract design under the heterogeneity and short-termism of agents.Our research shows that the optimal contract must weigh the agent's information rent,incentive cost,and benefit to overcome the contract's adverse selection and moral hazards.Agents with higher moral levels were more likely to choose higher effort and lower manipulation.Simultaneously,the principal offers lower incentives and receives more significant payoff.We also extend our model to investigate the benefits of Bayesian learning.Furthermore,we compare the principal's returns in general and learning models and find that the learning contract can bring more profit to the principal。
基金supported in part by the National Nature Science Foundation of China under grant No. 70832005Shanghai Leading Academic Discipline Project under Contract No. B310
文摘Based on game theory and principal-agent theory, this paper focuses on how to control product quality and design quality contract in supply chain when moral hazard exists. We set up the supplier and buyer's expected profits function model, in which the supplier makes production process investment-level decision and decides on the product quality prevention level, whereas the buyer makes quality evaluation decision and decides on the product quality inspection level. The supplier with a moral hazard of reducing investment level may lack investment in the production process; thus, the buyer will pay the information rent to incentivize the supplier to improve the investment level. The buyer creates the moral hazard of exaggerating the product quality defective rate, who may overinvest in the inspection process. We use the optimal condition to solve supplier's first-best investment level, product quality prevention level, and buyer's first-best quality inspection level, internal penalty, and apportionment ratio of external failure cost. We also conduct a simulation test that shows the following: When the supplier improves its investment level, its product quality prevention level will increase, and the buyer's quality inspection level will decrease. With the improvement in the buyer's product quality inspection level, its internal penalty will increase, and the supplier's external failure cost will also increase while its expected profits will decrease. Hence, the buyer will design an incentive contract, the expected profits of which will increase, and the whole supply chain's joint expected profits function may become an inverse U shape. Finally, we develop a simulation example and propose suggestions for quality control strategy and contract design in the supply chain under the conditions of asymmetric information.
文摘INTRODUCTIONHart once proposed in his book "corporate governance": Some theory and implications that governance issue would emerge if there is any interest conflict between principal and agent with no support of a complete contract in a principal-agent relation. Governance theory developed from the governance issue believes that an effective institutional arrangement could avoid or decrease the occurrence of these issues and force the agent to maxilnize his principal's interest.
基金Supported by the Social Science Foundation of China(18BJL017)the Natural Science Foundation of Liaoning Science and Technology Bureau(20170540439)
文摘The optimization investment policy decision of SCM-supply chain management-implementation has been analysed under symmetric and asymmetric information conditions.For both conditions,SCM implementation optional decision optimizing models have been developed.In these models,both clients and vendors try to pursue their own benefits.Based upon the principal-agent theory,the models show to what extent a principal(a client)needs to pay more to an agent(a vendor)in a context of asymmetric information.For the client it is important to understand the extra costs to be able to adopt effective strategies to stimulate a vendor to perform an optimal implementation of a SCM system.The results of a simulation experiment regarding SCM implementation options illustrate and verify the theoretical findings and confirm the general notion that the less informed party is obliged to pay information rent to the better-informed party.
基金supported by the National Natural Science Foundation of China under Grant No.71571001。
文摘This paper studies the problem of principal-agent with moral hazard in continuous time.The firm’s cash flow is described by geometric Brownian motion(hereafter GBM).The agent affects the drift of the firm’s cash flow by her hidden effort.Meanwhile,the firm rewards the agent with corresponding compensation and equity which depend on the output.The model extends dynamic optimal contract theory to an inflation environment.Firstly,the authors obtain the dynamic equation of the firm’s real cash flow under inflation by using the It?formula.Then,the authors use the martingale representation theorem to obtain agent’s continuation value process.Moreover,the authors derive the Hamilton-Jacobi-Bellman(HJB)equation of investor’s value process,from which the authors derive the investors’scaled value function by solving the second-order ordinary differential equation.Comparing with He;,the authors find that inflation risk affects the agent’s optimal compensation depending on the firm’s position in the market.