The Joint Information Salary Contract Design for Corporate Manager Based on Game Theory

According to the principal-agent theory, in the condition of asymmetric information, the effectiveness of incentive salary programs is related to the private information which can be gathered from the agent. In the research, game model is applied to analyze the relation between the owner and the manager, finding some main factors which affect the manager´s working effort. These factors are: the benefits and costs the manager gains from hard-working, the penalties she receives for not hard-working and monitoring costs that the owner pays for it. Based on these, designed the program which helps sharing the information between owners and managers effectively, which can increase the manager´s benefits from hard-working, and reduce the costs for supervising. Finally, achieve incentive compatibility between owners and managers.