Research On Principal Agent Problem In Construction Supervision

Construction supervision is a scientific management system which has been carried out in construction field in China. It has strategic meanings for shunting the economic system and exploiting the international construction market.Based on principal-agent theory, this paper analyzes the principal-agent problems and relative incentive-restraint mechanism in construction supervision system. It also illustrates the ways to design incentive-restraint mechanism of principal-agent problems. On this basis, a countermeasure research is carried out to solve the principal-agent problems.At the beginning of the paper, it gives an illustration of principal-agent relation and the problems resulted from it in construction supervision system. Through studying the general model, a specific plan of establishing incentive-restraint mechanism is suggested. First, building scientific choosing mechanism. In this section, this paper analyzes the necessary for construction supervision bidding in China and constructs a model of appraising bidders by grey-relating theory. Second, setting corrective appraisal mechanism. Here, it sets an appraisal index system and constructs a fuzzy comprehensive model to evaluate the results of construction supervision. Third, designing an effective incentive mechanism. Through analyzing the principle of designing incentive mechanism and the factors which affect the moral hazards of the construction supervision, it gives specific incentive methods. At last, this paper has a summary for solving the principal-agent problems in construction supervision system.