Development And Extension Of Hu Theory

The core of the problem of agency is how to determine the basis. The basis is the planning target that the principal asks the agent to reach or that the latter promises the former to accomplish in the relationship of agency. There must be a problem of basis-determining in the problem of agency when it comes to the quantified targets, such as profit, sale volume, etc. But how to determine the basis has been a difficult question which baffles the people all over the world. The reason that it is hard to determine the basis accurately is the information asymmet between the principal and the agent. In contrast to the agent, the principal has less information obviously. So it is urgent to find how to solve the problem of what kind of countermeasure the principal should choose in the contrast game of the information asymmet with the agent. "A Theory of Assessing Dasis Determination", ie" HU Theory" raised by Professor Hu Zuguang is just a good way to solve this problem, which has been applied in many enterprises and solved the problem of determing the basis successfully. This treatise is the research on the development and extension of HU Theory.Firstly on the base of the original system, this treatise contrusts a new system to determining the basis. The new system can guild the agent to report a bigger self-offered and exert himself to accomplish it when he doesn't make clare the future profit through the incentive mechanism of reporting more, in addition to making the agent"jump to pick apple".And then the treatise analyses the characters of the original system which adds a new coefficient of rewarding for bigger self-offered. Then it supplements the relationship of the coefficients, in order to assure the system to encourage the agent to report a bigger basis. After that, it compares the new system with the original one so as to analyse each other merits and demerits and find the adapting situations.Finally, the treatise studies the application of HU Theory on the situation that the future profit is influenced by the random enviroment. Having analysed the agent how to determine the self-offered and losing risk in carrying the contrast by a simplified model, the treatise varifies that HU Theory remines the good character in the random enviroment, so that it extends the application fields of HU Theory.