| The main objective of principal-agent theory is to research how to design the optimal contract to motivate agents under the conflict of interest and information asymmetry, so that the principal-agent relationship is also an important method and path for social participants. Many scholars have come up with theories such as annual salary system, stock option motivation mechanism etc., these theories have played an important role in the process of enterprise revolution and social economic development.However, the former studies based on traditional principal-agent theory and under the traditional structure of economy, which still based on the hypothesis of rational man and only focused on the relationship between one principal and one agent, one principal and multi-agents, or multi principals and one agent. These theories are single principal-agent theory and might have some problems if the incentive mechanism is designed: First, modern organization theory believes that the bonding relationship among people or organizations is presented to be a network objectively existed with the development of modern organization. So that traditional principal-agent theory ignored some players in principal-agent, relationship may have different roles. Second, the traditional principal-agent theory ignored many reality elements, so it can not be fully used to explain many economic phenomenons. Third, the traditional principal-agent are based on the hypothesis of rational man, but the recent researches believes that the behavior of individuals are bounded rationality, and a series of game theory experiments proved that the majority of people have fairness preference, when they pursuing their own maximum interest, they also concern the fairness.This article is going to discuss the three issues of the tradition principal agent theory, by setting up a structure of chain-like multi principal-agent and implanting the theory of fairness preference, to complete the traditional theory.Firstly, this article gives a literature review of the economy theories, which explains the premises and definitions. At first, it reviews the traditional principal-agent theory, including the bilateral principal-agent theory, multi-agents theory, common agency theory and multi-task principal-agent theory. At second, it introduces the game theory experiments, which proved the existence of fairness preference. For example, ultimatum game experiment, gift exchange game experiment and trust game experiment. Third, it introduces related theories about fairness preference, including the reciprocity theory that is created by Rabin and the inequality-aversion theory based on Fehr and Schmidt utility function. Forth, it analyses the generally existence of multi principal-agent relationship, which is the organization's important basic unit in the future. Fifth, it creats a chain-like multi principal-agent relationship and proposes that as the main research objective.Secondly, to complete the traditional principal-agent theory, this article introduces the fairness preference theory into chain-like multi principal-agent relationship, and it makes a depth study by comparing the agent behaves on both rationality and a notion of fairness centered at reciprocity. In the two stages principal-agent relationship, because of the optimal level of effort of middle-man and pure agent is positively related to the optimal revenue sharing ratio, so managers of enterprises could take good use of the method of increasing revenue sharing ratio to fully arouse the work enthusiasm of the employees. If the agent's risk aversion degree and output variance get greater, the result of through increasing revenue sharing ratio coefficient to motivate agent is less obvious. Under the condition of reciprocity, the agent is friendly to the principal if the agent's effort is greater than the half of his biggest effort level, and the principal is friendly to the agent if the fixed income that the principal gives is greater than half of the maximum. At the same time, the more fixed income, the more effort agent will give. It has well explained the reason that employees have better performance and professional ethic in some companies which have good welfare policy. Thus, the optimal comtract provides a higher profit under reciprocity than what would be obtained when the agent behaves only on rationality.Thirdly, this article will analyze the multi principal-agent efficiency under the effect of inequality-aversion theory by comparing the equilibrium results on both symmetry information and asymmetric information. Under the condition of symmetry information, because of the fairness preference and the coefficient of performance dependency exerts significantly improves the level of effort of working agent, so managers of enterprises could take good use of the method of increasing employees' fairness preference degree and coefficient of performance dependency exerts to increase benefit of enterprise. Under the condition of asymmetric information, because of the fairness preference significantly improves the level of effort of working agent, so managers of enterprises could improve the work enthusiasm of the employees by increasing the fairness preference degree of medium and junior staffes. At the same time, if the traditional factor is less than 1/(2k)( k is the fairness preference coefficient), the incentives of surrounding performance for medium staff can also encourage junior staff. If the traditional factor is larger than1/(2k), the incentives of surrounding performance for medium staff have a negative impact to the work enthusiasm of junior staff. Since the bigger of the income gap between medium and junior staffes, it will destroy junior staff's feeling of fairness, therefor it is necessary to control the gap in proper range. The best employee is the one who have a smaller risk aversion Degree.Fourthly, this paper has a study on the information-discriminating mechanism of the agent's fairness preference information under multiple principal-agent structure. it is a improvement for above research. if an agent's fairness preference is a common knowledge under the condition of symmetrical information, the principle can design the optimum contract according to an agent's preference. In addition, if an agent's fairness preference is hidden under the condition of asymmetric information, the principle can discriminate the agent's fairness preference information by designing incentive compatible mechanisms because different agents have different individual rationality constraints. In consequence, the principle can completely remove an agent's information rent. Under different conditions, different fairness preference types of middlemen and pure agent have different combinations, the results of the final chain-like double principal-agent model also is different.Finally, this paper takes fairness preferences and equity incentive into the State-owned enterprises corporate governance framework. It not only makes analysis on the efficiency of application, but also gives some suggestion. The results of research show that, the equity incentive for the manager will not prevent the tunneling behavior of state-owned controlling shareholders in the state-owned enterprise, which is administrative, but the equity incentive for the professional managers with fairness preferences can restrain the tunneling of State-Owned controlling shareholders to a certain degree. Moreover, a perfect legal supervision can restrain the tunneling of State-Owned controlling shareholders. At last, main strategies for government were suggested. In addition, with the multilevel government structure background of our country, using the theory of this paper make a further analyze in government decision-making field. It also illustrates the necessity of fiscal decentralization. |
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