The Reputation Model of Multi Stage Dynamic Game

Aim To study the implicit restriction mechanism for hidden action in multi stage dynamic game. Methods A reputation model for restriction on repeated principal agent relationship was established by using the theory on principal agent problem in information economics and the method of game theory to study the implicit restriction mechanism for hidden action. Results and Conclusion It is proved that there exists implicit restriction mechanism for the multi stage principal agent relationship, some conditions for effective restriction are derived, the design methods of implicit restriction mechanism are presented.