Research On Reputation Appraising Mechanism To Prevent Moral Hazard Confronted By Client

With the analysis of the normal theory, method, character of Moral Hazard Prevention, we study the mechanism , appearance , reason and hazards to clients of project manager's immoral action in the period of project implementation. Put forward that Moral Hazard comes from contractor is the focus of Moral Hazard Prevention in the period of project implementation. So we give systematic research on this problem.Nowadays Reputation Appraising Mechanism is less applied to Prevent Moral Hazard than Motivating Mechanism. But our research show that Reputation Appraising Mechanism has more advantages than Motivating Mechanism and it can prevent Moral Hazard effectively. So in the further study we adopt multiple phase Principal-Agent Relation Reputation Model to certify the preventive efficiency of reputation and use AHP(Analytical Hierarchy Process) to establish the reputation appraising mechanism and concrete items of project manager.We wish this research can help the clients to choose the best qualified project manager properly, monitor and restrict his immoral action. All these measures can reduce the great loss social and economic benefit due to Moral Hazard.