The Constructure of Behavioral Principal-agent Incentive Model and Frame
Jianbai Huang · Economic Management · 2007
Following the basic hypnosis of rational individual,invariable preference and prospect utility theory,so there are many interpre- tative phenomena and paradox which standard principal-agent incentive model can not explain.The paper analyses the essential limitation of complete rationality and risk aversion hypnosis in standard principal-agent incentive model and analytical frame based on the challenge of behavioral economics on the basis hypnosis of newly classical economics,and point outs how to make use of the value function substituting for prospect utility function and bounded rationality substituting for complete rationality to reconstruct the principal-agent incentive model and analytical frame.The behavioral principal-agent incentive model and analytical frame which consider psychological characteristic and non- rational behavior of agent will improve interpretative power and adaptability of incentive model and frame accounting for realistic system.