Research on Incentive Mechanism for Agents under Asymmetric Information Condition

Agents' speculation behaviors are series problems which need to be solved. Through mathematical models and game theory, this paper analyzes optimal incentive contracts between principals and agents under asymmetric information condition in order to solve the problems in establishing incentive mechanism for agents. The relationship between incentive and risk is discussed and the best equilibrium between them is given. Supervision mechanism is introduced and analyzed in the design of incentive mechanism for agents. It expands the theoretical frame for incentive mechanism. The results are as follows: Supervision mechanism is related and complementary with incentive mechanism. Both can encourage or guide the agents to work hard towards common goals. Therefore, the function of the incentive mechanism and the supervision mechanism should be considered simultaneously in the design of incentive contracts for agents. It helps to prevent agents from speculating. Introduction of supervision mechanism into incentive mechanism not only results in theoretical innovation, but also has great application value in practice.