Economical Incentive Contract Design with Asymmetric Information in Building Energy Efficiency Retrofit

Existing Building energy efficiency retrofit is an important component of Chinese building energy efficiency strategy. There are several factors determining the level of inputs and the effect are asymmetric information within the energy efficiency regeneration process, such as endeavor of the owners of existing buildings, etc. Using the principle-agent theory to establish a cooperative game model of the Government and the owners of existing buildings, and then educe bilateral strategies of this cooperative game. Under the assumption of risk-neutral agent, analyze the risk contracting, incentive costs and agent cost ulterior. The conclusion is that the level of efforts made by existing buildings owners plays a key role to the process of energy efficiency retrofit.