A Study on the Mechanism of Financial Control Based on One Institutional Game Theory

摘要

Based on the agency contract theory,this paper constructs an institutional game model about financial control between the investor and the manager in Enterprise.According to the model,we can draw conclusions about mechanism of financial control:firstly,being an institutional arrangement,the financial control effecting depends on the institutional cost( monitoring cost).Secondly,the restrictive function of financial control is able to turn external cost caused by the manager's breaking agency contract to internal cost and makes sure managers,internal cost can restrict them to break agency contract.Finally,the incentive function is to realize equilibrium between rights of financial control and financial claims,by which,the conflict of agency contract between investors and managers can be coordinated.