Explicit Incentive Mechanism of the Agent Construction System for Government Investment Projects: A Model Study Based on Asymmetric Information

The incentive mechanism of the agent construction system for government investment projects is not well developed in China, which seriously affects the working enthusiasm of the construction agent. Aimed at improving the explicit incentive mechanism of the agent construction system and exploring how the construction agents' comprehensive strength and the government investors' centralization cost affect the expected utility of the government investors and the best incentive intensity to reach the relationship between expected utility of government investors and the best incentive intensity, respectively. This paper constructs a principal agent model based on asymmetric information. The research results show that the construction agents' comprehensive strength plays an important role to the project output. Government investors can increase incentive intensity appropriately based on the centralization cost to encourage construction agents to work hard and to increase expected utility.