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Strategic Study of CAE >> 2005, Volume 7, Issue 11

Agency Costs of Engineering Procurement

1. School of Civil Engineering , Southeast University, Nanjing 210096, China

2. Navy Engineering University, Tianjin 300450, China

Received: 2004-10-26 Revised: 2005-03-10 Available online: 2005-11-20

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Abstract

Based on asymmetric information game and principal-agent theory, by analyzing the forming reasons and connotation relationships of agency costs which occurs during the process of engineering project procurement, this paper gives out the model of best contract and monitor mechanism. It also analyses the relationships between the monitor mechanism and incentive mechanism.

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