Research On Choice And Incentive For Engineering Supervision Under Asymmetric Information

Construction supervision introduced to china in 1988. More than 10 years, it makes great effect to enhance and guarantee the quality of projects. However, in the new history, construction supervision still exist many problems to be solved, such as: operated under the planned economic system, competitive bidding mechanism has not been perfect, lack of honesty and trustworthiness with supervision units, .etc. As supervision provides high-skill services, supervision bidding should not copy the ways and means of construction bidding. It is necessary to explore the characteristic bidding mechanism for supervision. Meanwhile, although a legal form of contract is signed between client and supervisor, under asymmetric information, "contract opportunism" behavior which the supervisor's actions inconsistent with the commitments can not be ruled out. Therefore, exploring the supervision bidding design and incentive mechanism in order to reduce the "adverse selection" and "moral hazard" is of great significance for client.In this paper, based on the theory of asymmetric information economics, two major issues including supervision's choice mechanism and incentive mechanism are studied both in the stages of bidding and contract performance. The following are the main points:1. It analyzed the objective and subjective reasons which caused principal-agent problem between the client and supervisor, and explored the application feasibility of game theory and principal-agent theory which applied to the supervisor's choice and incentive study.2. It analyzed the asymmetric information during supervision bidding, and explored relevant measures that how clients made properly options to prevent "adverse selection" by game analysis on supervision bidding mechanism.3. By comparing the similarities and differences between supervision bidding and construction bidding, according to the uniqueness of supervision bidding, it established supervision evaluation indicator system, and a supervision evaluation optimize model was put forward based on the level-gray correlation analysis.4. It established selective reward principle-agent model between owner and supervisor, and analyzed the influence factors which should be considered on the designing of single supervisor's incentive reward under asymmetric information. Based on this result, factors to be considered while establishing the incentive system of supervisor were put forward: the reputation both internal contract and external agent market.5. Through game analysis on"supervisor combining with contractor"during contract performance, it concluded that the realization of client's aim to a large extent depended on a number of agents'joint effort. Base on this research, two aspects of multi-agent incentive contract design were proposed: "absolute performance comparison" and "comparative performance".6. It applied the supervision evaluation decision-making optimize model which based on the level-gray correlation analysis into "Dongting Lake City yen loans Flood Control Project -- Taoyuan County Supervision bidding of Civil Engineering" evaluation. Compared with the composite scores method, it made analysis of the evaluate results.7. It made preliminary discussions on external environment which the operation of supervision incentive & restraint mechanisms demanded.