A Study On Moral Hazard Management In Construction Project

The thesis systematically studies the Moral Hazard in construction processes, and the study is carried out from two angles: interior mechanism (the best incentive and monitoring model) and exterior mechanism (market credit regulation and project management innovations).By applying the principal-agent theory, an incentive model between the Employer and the Contractor is constructed, and meanings of the major parameters in construction reality are interpreted. The thesis analyses the main causes of asymmetric information, as the bases of further study. By using single-task and multiple-task principal-agent models, the thesis studies various methods of designing best incentive contract, in order to get rid of Contractor's Moral hazard.By applying engineer's monitoring mechanism, the thesis mathematically proves that the engineer's monitoring work can reduce adverse effect of asymmetric information, and save cost for the Employer. A principal-agent model between Employer and Engineer is also constructed to deal with the engineer's Moral Hazard.By introducing market credit model, the thesis comes up with suggestion of building credit regulations and system in construction market. In view of improvement and innovation of project management organization model, the countermeasures to reduce asymmetric information is studied, and methods such as Partnering Management and developing Integrated Management System are put forward.