Title: Research of incentive mechanism based on asymmetry overconfidence level
Abstract: Aiming at the principal-agent relationship with a rational principal and a overconfidence preference agent,this paper investigates how to design the incentive contract the principal offers to the agent considering moral hazard and private overconfidence level.Incorporating principal-agent theory,we design the incentive contract for the principal to motivate the agent and screen its real overconfidence level.Furthermore,we analyze the corresponding optimal contract and compare the results with the common knowledge scenario.Comparison results show that when the principal is uncertain about the agent's overconfidence level,its expected profit decreases while the agent with private information exerts less effort but obtains higher income,which implies the value of information,the conclusions have an important application value on designing contract and enhancing incentive efficiency.
Publication Year: 2015
Publication Date: 2015-01-01
Language: en
Type: article
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