Research on Cost Control Strategy under Asymmetric Information

摘要

The problem how a manager motivate producers to reduce product costs under asymmetric information is discussed on a basis of principal-agent theory. Under asymmetric information, manager can not monitor producers' effort to reduce costs; therefore, manager needs to motivate producers. The manager determines a contractual basic cost according to his own requirement and producers'self-reported cost, and establishes a model to maximize manager's expected utility under the conditions of producers' individual rationality constraint and incentive compatibility constraint. The model uses incentive and punishment coefficient as decision variables and the evolutionary programming algorithm is used to do the simulation.