Study On Incentive Mechanism Of The Project Contractor Based On The Multitask Principal-Agent Theory

Engineering project construction plays a very important role in the national economy. At present, the extensive management mode of engineering project construction leads to the poor quality and many other issues. This is called "moral hazard " of the contactors and the key reason of this phenomenon is the conflict of interest and information asymmetry between owners and contractors. However, faced with the complex multi-tasking environment, the contractors cannot be constrained effectively by the traditional contracts. So the establishment of an effective incentive and standardized system for contractors has important practical significance.In this paper, we combine game theory, information economics theory with multi-task principal theory to study the Contractor Incentive Problem. Based on the H-M model, from the perspective of principal (the owner), agent (the contractor) and the attribute of task itself, taking into account the relationship between the task, the importance of the task, the ability of the contractor, the impact of fairness preferences, reputation effect and other information individually. through different combinations of subject, we introduce them to expand the H-M model, reconstruct the H-M model and make rigorous mathematical derivation to obtain the optimal solution. Then we can use it to help the owners to choose the best incentive intensity to drive the contractor accordingly allocate his effort to maximize the utility of the owners under the participation constraint and incentive compatibility constraint. Finally, we use MATLAB software to simulate the effects of each factor on the optimal solution and find out the sensitivity factor.Based on analysis of the whole paper, we mainly draw the following conclusions:First, the incentive effect of the owners will be larger while the risk aversion degree and the effort cost coefficient of the contractor is lower and the external environment of uncertainty is lower; Second, considering the substitutes and differences of different tasks, the owner should allocate more incentive intensity to the tasks with low uncertainty, high importance; The contractor with high capabilities should be allocated with more incentive intensity; Third, "fair preferences" of the contractor has a major impact on the incentive effects of the owner, the owner should allocate more incentive intensity to the contractor with high "fair preferences"; Fourth, the effect of reputation incentive is not only reflected in the repeated game between owners and contractors, it should also be taken into account in a one-time game. Reputation incentive can reduce incentive cost while maintaining the original contractor’s efforts.