Research On The Pricing Model And The Strategies Of Defence Equipment Purchase Contract

Equipment acquisition is a typical principal-agent relationship in market economy system.Despite that the transformation of acquisition system and the establishment of contract management,the relationship is inadaptable to the demand of market economy system. The actions of the principalparts in acquisition market are nonstandard. The principal-agent relationship is far from availability.The asymmetric information still exists, and the actions of adverse selection and moral hazard blockthe progress of equipment acquisition.Based on the theory of principal-agent, we focus on the equipment acquisition relationshipoptimization, pricing model and pricing strategies considering the income of the military and defensecontractors. Based on the principal-agent relationship of equipment acquisition, we analyze thepossible improvements for China. A contract pricing model under monopoly conditions for equipmentacquisition is established, based on this, we analyze the impact of adverse selection and moral hazardon contract pricing strategy. Next a contract pricing model under competitive conditions forequipment acquisition is established, after that, the analysis of contract pricing strategies under theobservable effort level and the unobservable effort level is given. The studies show that the emergenceof asymmetric information reduces the effectiveness of the military equipment procurement, and theoptimal level of resource allocation offset.