Research of contractor’s incentive problem under the ternary structure

Abstract

In order to solve the problem of insufficient incentives for the contractor due to the construction of information asymmetry, the use of agency theory, under the ternary structure of owners, contractors and supervisor, based on the information available verifiable and information partial verify, the conditions were established under the supervision of the owners of the side effects ofmoral hazardmodel contractor, conducted a quantitative research project management. The results show that: in the BOQ model is based on the condition part of verifiable information will increase the risk of the contractor’s risk aversion, and it will make the owners to obtain a lower expected utility, size and risk of the contractor and the contractor supervisor’s ability to work is negatively correlated with the cost of the contractor’s work is positively correlated.