Abstract: By principal-agent theory and bargaining theory,this paper investigates mutually incentive problems in team production.It shows that an independent work team confronts mutually incentive problems,and there exists mutual principal-agent relationships among team members.By introducing profit-sharing mechanism among team members,it can effectively stimulate team members to make great efforts to overcome moral risk in joint production and to realize constrained Paretian optimal.The mutually incentive model is constructed innovatively in this paper.There is important meaning,theoretically and practically,to instruct profit-sharing in joint production.

Key words: team production, principal-agent, profit-sharing, incentive