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Chinese Journal of Management Science ›› 1999, Vol. ›› Issue (2): 62-66.

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Study on Impact of Uncertain State of World to Optimal Contract in Prinapal-Agent Theory

Xu Xin, Qiu Wanhua   

  1. School of Management, Beijing Univevsity of Aero & Astro, Beijing 100083
  • Received:1998-11-05 Online:1999-06-28 Published:2012-03-06

Abstract: This paper points out that the principal and agent may have different prior probability to the uncertain state of world, and the influence of state to the agent’s effort cost should be considered in the principal-agent analysis model. Taking this opinion into a sample principal-agent model, some conclusion with new meaning is obtained.

Key words: principal-agent, state of world, effort cost