Research On Output-participating Incentive Tactic With Fairness Preference

Incentive theory is a key issue in both of the research of management and economics, Recently a series of experiment researches approved that people possessing fairness preference. The incentive tactic which considers fairness preference has important meanin.This paper firstly summarizes the actualities and contents about the researches for the incentive in the management field, and some important theories closely relevant to the incentive issue in the economic. And then the paper focuses on the developing processes and research situation of the fairness preference theory, and the domestic and foreign applying of the fairness preference theory in the incentive issue.After concluding the foundation of theories, the paper suppose that agents possess envy preference and pride preference, to get the basic form of the payment contract model which considers fairness preference. And then the paper operates the basic form under two different situations: information symmetry and information dissymmetry, educe the optimal payment contracts under these two different situations and discuss the characteristics of these two different contracts.This paper emphasizes the establishment of output-participating incentive tactic in short term and long term based on the optimal payment contract, and analyses the applications of them. And then, considering the developing situations of the Chinese companies and the characters of the long term incentive methods, the paper selects the phantom stock option based on the EVA as the carrier of the incentive tactic in long term, and get the common form of the output-participating tactic in long term without considering the risk burdened by the companies in the future. Finally, the paper uses the VaR method to get the common form of the output-participating tactic in long term considering the risk burdened by the companies in the future.On the basis of those researches conclusions, this paper selects the innovation of the payment in the procurement department as the example to show that how important the output-participating incentive tactic with fairness preference to the applying in the real world.At last, this paper sums up the main conclusions, indicates the progress of the researches and the realistic meanings, analyzes the limitations of contents and methods in this paper and the possible research directions.