The Research Of The Moral Hazard And Contract Design In The Process Of The Open-end Funds Investment

As the first open-end fund, which is named hua-an innovation fund, is issued in September 2003 in our country, the open-end funds have been the investors'favorite and developed quickly, whose advantage is professional financing and portfolio investment. Meanwhile there are also many questions exposed during the developing process of open-end funds, especially the moral hazard of the funds managers and the funds trustees, caused by the asymmetric information across the funds investors,funds managers and the funds trustees. Those actions invade the funds investors'income and go against the healthy development of the open-end funds.In the investment process of open-funds, the conflict of interest around the funds investors,the funds managers and funds trustees is involved. During the process, the three participators choose their own strategic behavior, influencing their mutual incomes. Moreover, in the managing process, there is information-asymmetry around the three participants, resulting in the moral hazard of the funds managers and the funds trustees, invading the funds investors'income and resulting the unhealthy development of the funds market.The article studies the moral hazard and contract design through the combination between qualitative analysis and the quantitative analysis. The article is composed by five chapters: the first chapter is the preface, which studies the meanings of the choosing and the studying actuality of the title; the second chapter analysis the process of the open-end funds investment, introducing the correlative concept of the open-end funds and the rights and the duty of the participator, also researching the game relations of the three participators; the third chapter studies the reasons,the phenomenon and the harm of the moral hazard in the process of open-end funds investment; the fourth chapter studies the game relation between the funds investors and the funds managers in the process of the funds investment, using the principle-agent theory, investigating the one-stage and multiple-stages investment model respectively and getting the NASH equilibrium results, and then designing the best contract between the funds investors and the funds managers; finally, the article brings some resolutions to settle the moral hazard and to advance the open-end funds market more perfect.