ISSN 2167-0439
International Journal of Management and Business Studies ISSN 2167-0439 Vol. 8 (9), pp. 001-007, September, 2018. © International Scholars Journals
Full Length Research Paper
Multiple-level principal-agent model under adverse selection
Pu-yan Nie
Institute of Industrial Economics, Jinan University, Guangzhou 510632, P. R. China. E-mail: [email protected]. Tel: 86-20-85221069.
Accepted 18 Ma, 2018
Abstrat
Almost all principal-agent models focus on single level situation, while there exist numerous cases of principal-agent relation with multiple levels in practice. This paper develops principal-agent models with multiple levels based on subcontract phenomena. The corresponding properties about principal-agent models with multiple levels under adverse selection are explored. There exists twist of the quantity in subcontract. We also find that the efficiency of principal-agent with multiple levels is lower than that with single level.
Key words: Principal-agent model, multiple levels, incentive mechanisms, industrial organization, game theory.