Research On Law-executor System Of Anti-monopoly Of China In The View Of Principal-Agent Theory

Law-executor system of Anti-monopoly of China is interpretation and defense of the public interest theory of regulation. The public interest theory of regulation thinks of the government as a man who is kind-heartened and can do every thing possible, which proposals that the reason of government regulation is market failure, and the purpose is protection of social public interest. Under the guidance of the theory, executor system of the Law-executor system of the Anti-monopoly of China has problems of the lack of incentives and weak supervision, which reflects weak enforcement in practices of Anti-monopoly Law enforcement, for example “the case of alleged price fixing of China Telecom and China Unicom”, “the case of alleged price fixing of six bank”. Essentially, China’s law-executor of the Anti-monopoly is just the agent of Anti-monopoly enforcement powers for all the public. There is a difference of objective function between agents and the public. Under the situation of lack of incentives and weak supervision, Law-executor who is rational and economic will violate the interest of principal and pursue the utility maximization. Therefore, in order to fundamentally change the status quo lax enforcement of Anti-monopoly Law, rational choice is to substitute principal-agent theory for public interest theory of regulation. Under the guidance of principal-agent theory, the overcoming problem of principal-agent theory is the core of subject of law-executor system of the Anti-monopoly, and incentives and supervision are key points of system. The paper is based on the reflection on the main theoretical basis and institutional deficiencies of executor system of the Anti-monopoly Law of China, is under the guidance principal-agent theory, and is proposed to improve observations and recommendations of the system by the successful experience of extraterritorial system. In addition to the introduction, this paper is divided into four parts.Introduction: to clarify the paper’s background, review research’s purpose, research’s value and so on.The first part: the theoretical basis and reflection of law-executor system of the Anti-monopoly law of China. Law-executor system of the Anti-monopoly of China is interpretation and defense of the public interest theory of regulation. It is reflected in the regulatory purpose, humanity hypothesis and recommendations of policy in three areas. Due to insufficient incentives and weak supervision in practice, the system leads to lax enforcement of the Anti-monopoly Law. Theoretical root of this phenomenon lies in the humanity hypothesis public interest theory of regulation which is regarded as the theoretical basis of executor system of the law-executor system of Anti-monopoly. Public interest theory of regulation puts kindheartedness and almighty as its humanity hypothesis. So double soften incentives and constraints on the design of the system are the main questions of the system.The second part: the theoretical basis’ choice of law-executor system of the Anti-monopoly. Principal-agent theory’s humanity hypothesis is “rational and economic man”. The theory underlines the differences of the objective function between principal and agent, and focuses on prevention agents engaging in moral hazard and adverse contrary to the interests of clients under asymmetric information. Essentially, law-executor system of the Anti-monopoly is just the agent of Anti-monopoly enforcement powers for all the public. There is a difference of objective function between agents and the public. From the perspective of the principal-agent theory, law-executor system of the Anti-monopoly of China has some problems, for example virtual spaces of principal, unclear responsibilities and other principal-agent problem because the proxy chain is too long and exacerbated by information asymmetry.These problems also exacerbate the reverse proxy selection and moral hazard.The third part: the study of extraterritorial law-executor system of the Anti-monopoly. Respectively, United States, Japan, and Germany of Law-executor system of the Anti-monopoly, are to solve the problems of the long agency chain, multiple agents, weak supervision and some other aspects. These ways can provide some reference for law-executor system of the Anti-monopoly of China.The fourth part: improving executor system of the law-executor system of the Anti-monopoly. Under the guidance of principal-agent theory and in order to prevent moral hazard which is the key, such as principal-agent virtual spaces, multiple agents problem and so on, the paper mentions legal suggestions to improve law-executor system of the Anti-monopoly of China, for example the introduction of public interest litigation, the integration of functions, and so on.