Collusion, Corporate Governance and Incentive Contract: An Application of Game Theory

Autor: Jui-Chia Lin, 林瑞嘉
Rok vydání: 2004
Druh dokumentu: 學位論文 ; thesis
Popis: 92
Because independent-director system can’t elaborate it’s supervise function completely in Taiwan, this paper try to use game theory model to explain this phenomenon and infer that there exist collusive incentive between interior-director and independent-director. We consider two incentive contract (there are single policy and self-selection policy), and under different condition to solve the collusive behaviors. Following the model we set, in the no-collusion condition, there exist first best equilibrium; in the other world, in the collusion condition there doesn’t exist first best equilibrium. When interior director and independent director exist collusion, the equilibrium policy is the second-best collusion-proof policy and we can solve the collusion condition increase provide stock dividends to interior director. When the type of independent director is uncertainty, we can use incentive contracts of self-selection policy or single policy to solve. In the incentive contract of self-selection policy condition, we have to discuss the both case, they are “optimal collusion-proof contract” and “optimal non-collusion-proof contract”. We find that upon two policies are different, and however what is the optimal equilibrium contract, we have to see collusion probability is large (approximate one) or small (approximate zero). Finally, in the incentive contract of single policy, because there exist honesty and collusion two type independent director，we have to choose between non-collusion-proof single policy and standard second-best collusion-proof policy. We find that under the single policy of non-collusion-proof contract, the expected utility of interior director appear strictly decreasing with collusion probability unless collusion probability is zero.
Databáze: Networked Digital Library of Theses & Dissertations
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