Author:
Gu Yuandong,Zhao Linlin,Zha Yong,Liang Liang
Abstract
This paper studies the impact of two decision makers’ interaction with conflicts on the efficiencies of the system. We start with a general principal-agent framework where the principal and the agent make decisions independently and the principal has a contradictive objective to that of the agent. We develop data envelopment analysis (DEA) models in the principal’s and the agent’s perspectives respectively. Non-cooperation between the principal and the agent is discussed to illustrate how one decision maker affects the other and the corresponding efficiency and incentive contract of the system. In addition, cooperation of the two parties is also analyzed to better derive how the performance of the system is influenced by the parties and their interactions as well. Then, this study illustrates the proposed models and effective incentive contracts by applying them to the efficiency evaluations of 22 China listed electric power companies.
Funder
the National Natural Science Foundation of China
Foundation of Jiangsu Higher Education Institutions of China
Subject
Management Science and Operations Research,Computer Science Applications,Theoretical Computer Science