Abstract
The separation of ownership and management is a common operation mode in modern enterprises, which establishes the principal-agent relationship between modern enterprise owners and professional managers. Due to the information asymmetry and interest conflicts between the principal and agent, the principal-agent problem will occur and affect the efficiency of enterprise operations. Therefore, it is necessary to propose measures to improve the principal-agent relationship. This paper analyzed the principal-agent problem between enterprise owners and professional managers based on system dynamics, evolutionary game, and principal-agent theory and built a principal-agent evolutionary game model to analyze the rule of strategic choices and predict the equilibrium outcomes of different scenarios. In addition, the influence of different factors on strategic choices was simulated by the system dynamics model. The results depicted that the basic benefits and costs of cooperation are the key factors of the strategic choices, and the gap between the expected payoffs of different strategies also affects the probability of choosing those cooperative strategies. Proper supervision, standardization of the managerial labor market, and establishment of long-term incentives are crucial to cooperation between enterprise owners and professional managers.
Highlights
In the modern economic market, the sustained, stable, and healthy development of enterprises is closely related to the national economy and people’s livelihood
Erefore, based on the assumption of bounded rationality and asymmetric information, the authors take the conflicts of interests between the two parties of the game as the focus, introduce the principal-agent payoff into the game analysis process, and construct an asymmetric 2 × 2 dynamic evolutionary game model to find out the behavior evolution path of enterprise owners and professional managers
The authors focused on the characteristics of the decision-making behaviors between enterprise owners and professional managers, analyzed the principal-agent problem between enterprise owners and professional managers using system dynamics, evolutionary game and principal-agent theory, discussed the evolution of both parties’ strategic behaviors under 18 different scenarios, simulated the impacts of different factors on strategy selection and behavioral evolution, and provided a theoretical basis for resolving the principal-agent problem
Summary
In the modern economic market, the sustained, stable, and healthy development of enterprises is closely related to the national economy and people’s livelihood. Due to the different interest demands and asymmetric information, professional managers may take speculative behavior against the intention of the principal, causing the agency problem of moral hazard [5] It is a major theoretical and practical issue facing the sustainable development of modern enterprises to improve the principal-agent relationship of enterprises and realize a win-win cooperation between both parties. Erefore, based on the assumption of bounded rationality and asymmetric information, the authors take the conflicts of interests between the two parties of the game as the focus, introduce the principal-agent payoff into the game analysis process, and construct an asymmetric 2 × 2 dynamic evolutionary game model to find out the behavior evolution path of enterprise owners and professional managers.
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