Study on Incentive Contracts for Firms' Technological Innovation under Conditions of Slack Resource Allocation

Based on the analysis frames of the multi-task principal-agent model,this paper formulates a model of principal-agent with asymmetrical information while firms use newly-added resources invested and slack resources for technological innovation.Through analysis of the model,this paper obtains the optimal allocation of the newly-added resources invested and slack resources for technological innovation and the optimal incentive contracts of the technological innovation under configuration of these two resources.Firms can take optimal incentive packages such as appropriate incentive,heavy strong incentive,lightly strong incentive,heavy weakened incentive,and lightly weakening incentives according to the marginal returns and marginal cost of new resources and the interdependence of cost function between the actions.The research helps firms have more choices of resource allocation programs for technological innovation,which reduces risk and cost and improves resource efficiency and innovation performance of firms.