Game Analysis on the Failure of the Internal Supervision Mechanism of State-owned Enterprises

According to the behavior characteristics of managers of state owned enterprises, starting from the perspective of utility maximization and based on principal-agent game analysis, this paper establish a new state-owned enterprise managers corruption and internal supervisor behavior model, for the first time the internal recessive incentive effect variables is introduced in this model. This paper studies on the optimal behavior choice of state-owned enterprises managers and the internal supervisors. The existing system will induce the state-owned enterprise managers to achieve the goal of self utility maximization, and to suppress the effect of internal supervision, and connive with corruption. Finally, this paper discusses measures and suggestions about how to increase internal supervision and improve the supervision of state-owned enterprises themselves to reduce corruption of managers.