Analysis on motivation mechanism for agents under asymmetric information condition

Design on motivation mechanism for agents is an important problem in management science. The incentive model under asymmetric information condition is discussed through contract theory. The research finds that the effect of incentive is closely related to the agent´s working ability, the degree of risk averse, uncertainty of the work and endeavor cost. It can be found that the yardstick competition may improve the incentive contract. Finally, some advices about motivation mechanism for agents are given that help agents work hard for principals.