Application of Principal-agent Model to the Management of State-owned Assets in China

摘要

An effective and restrained incentive mechanism is essential to the governance of the state-owned enterprises. Based on the deep analysis of the principal-agent model and the strategy model, this article analyzed the influence of the owners and operators of state-owned assets who pursue for their own maximum utility to the business activities. Combining with the updated theory concerning agent-incentive, it improved the principal-agent strategy model under incomplete information. Consequently, it analyzed the application of these models to the management of the state-owned assets of China, especially state-owned enterprises. Based on the present situation of state-owned assets' management in China, it analyzed the deficiencies of these models, and gives several suggestions on improving the principal-agent relationship as well as the incentive and restrained mechanism in the management of state-owned assets of China.