Open AccessDesign of Principal-agent Incentive Mechanism between Government and NPO
Author(s) -
Honglian Guo,
Zhenzhen Wu,
Han Li
Publication year - 2021
Publication title -
proceedings of business and economic studies
Language(s) - English
Resource type - Journals
eISSN - 2209-265X
pISSN - 2209-2641
DOI - 10.26689/pbes.v4i1.1857
Subject(s) - incentive , government (linguistics) , risk aversion (psychology) , principal (computer security) , mechanism (biology) , principal–agent problem , public economics , microeconomics , economics , business , expected utility hypothesis , finance , computer science , mathematical economics , computer security , corporate governance , linguistics , philosophy , epistemology
Based on principal-agent theory, this paper establishes an incentive contract mechanism between government and NPO under asymmetric information, and analyzes the impact of absolute risk aversion and output level on the expected utility of government, NPO and society. Research shows that risk aversion is negatively correlated with the expected utility of government, NPO and society. The output coefficient is positively correlated with the expected utility of government, NPO and society. Reducing absolute risk aversion, increasing output coefficient and increasing government incentives can effectively motivate NPO to actively participate in social rescue activities.