Game Analysis on Credit Deficiency of NGO from the View of Principal-agent Theory

The structural features of non-governmental organization can be essentially described with the trust-agent chain classified into two types. The public being the principal and the government the agent as the first type, while the government being the principal and the non-governmental organization the agent as the second type. Game theory is used in this article to analysis their respective cost and profit of behaviors in this two relations, exploring deep factors on credit deficiency of non-governmental organization. And we can come to the conclusion that non-governmental organizations' credit is affected by factors of government supervisory cost, the extra revenue of non-governmental organizations being dishonest and punishment effect on unfaithful behavior in their organizational process. At last we explore what measures should be taken to solve the problem on credit deficiency.