Research For The Double Moral Hazard Problems And Contract Schemes

Moral hazard problems and contract schemes are considerable issues and the toughest questions which a lot of economic scholars study of at presents. Through previous studies, we know that the mechanism of contract is a useful tool which restrains the moral hazard. But the literature concentrate on the agent's moral hazard mainly; has ignored the principle's moral hazard. During the course of our research, we found that agent maybe suffers from information asymmetry and incomplete information during the process of trading. Because the principle has a motive of opportunism, agent is exposed to moral hazard too. This is the problem of double moral hazard which the dissertation studies, its connotation and denotation are all much more extensive than the moral hazard of agent in former research, and the studys on which it is only at the beginning stage. This dissertation studies the problem of double moral hazard using a game theoretic model and information economics theory. This paper introduces former result of study and relevant theoretical foundation at first, then has analysed venture captial and labor market the typical double moral hazard and contract scheme , through the result of study of these two questions, we conclude the general characteristic of the equilibrium contract under the double moral hazard. And then, we following thought which from simple to complicated, from special to the general, I consider double moral hazard under the dynamic environment, utilize APS method to investigate the general double moral hazard problem and contract scheme. I examine the nature of Pareto optimal contracts in this environment that respect both technological and informational constraints. After establishing the existence of optimal contracts, I show that every continuation contract of an optimal contract is itself optimal. Finally, I make use of two cases: stock option scheme ,insurance surveyors&loss adjusters and incomplete insurance , annotate the nature of the optimistic contract under the double moral hazard. What complements and extends previous studies in this dissertation is that, Firstly, the majority of studies on moral hazard have focused on agengt's moral hazard problems, few of which study double moral hazard, so the double moral hazard is a new view to study contract scheme. It is a innovation of principle-agent theory . Secondly, almost the literatures of double moral hazard only treat with static problems and this paper will discuss the problems under the dynamic environment. Thirdly, the paper comes to research and analyses some contract problems in reality and put forward some simple suggestions in terms of double moral hazard.