Study On The Risk Of Construction-agent System For Government Investment Project Based On Principal-Agent Theory

Construction-agent system is a management mode in which investment, construction and operation are implemented by different main bodies.Due to the new system, new things are introduced to construction management of government investment project on mechanism and procedure,and the traditional non-professional management is replaced.Since it's applied successedly on some areas,the efficiency of government's investment increase significantly.However, the construction-agency is still a emergent novelty by now ,and there is no systematic research on it and lack of practice ,and related policies and regulations can't take full role on it as well.As the application of Principal-agent Model, adverse selection and moral hazard are determined by its interior mechanism,which probably cause a series of risks.Moreover,the exogenous variable could cause kinds of risks which are difficult to be eliminated or controlled. Based on the Principal-agent Model,the paper focus on research of the risks of the Construction-agent system.In this paper,through the study on the development of construction-agent system,some prominent problems are pointed out during operating.It is illustrated how adverse selection and moral hazard take place on the government investment project with construction-agent system,and various of risk factors are summarized ,including agent risk,environment risk and project risk.Then,the theory of ecomomics of information is introduced to make the strategies for adverse selection and moral hazard,such as signaling,screening,contract incentive,principal supervision ,risk allocation and so on.According to achievement of study above,the paper put forword the corresponding strategies of risk management after analysing the related regulations in practice.As the result,It is suggested that credit evaluation system of construction-agent enterprise should be established,in which the model based on BP neural network is provided in the paper;It is emphasized that risk factors should be integrated into incentive mechanism,and construction-agent enterprise's costs are valuable to determine the maximum of prize;The paper present also that environment risk and project risk should be shared by government and construction-agent enterprise together through allocating risk on the contract.