Impact of Administrative Appointment on the Executive´s Management Capacity of Monopoly SOE

In order to analysis whether the administrative appointment can select eligible operators for state-owned enterprises(SOE), a two-stage dynamic game of incomplete information is used in this paper. By introducing an alternative parameter that can reflect the operating capacity, the game model can show what will the administrative appointment bring to this ability parameter. Equilibriums of this game model show the administrative appointment is not effectively in selecting good operators. Under this selecting mechanism, the capacity level of high profitability SOE´s executives is in the average of society, while the low profitability SOE´s executives is low-level or inefficiency.