Design of Incentive Contract for Technological Innovation of New Energy Vehicles with Asymmetric Information

Dong Cai, Chunxiang Guo and Yue Tan
Additional contact information
Dong Cai: Business School, Sichuan University, Chengdu 610065, China
Chunxiang Guo: Business School, Sichuan University, Chengdu 610065, China
Yue Tan: Business School, Sichuan University, Chengdu 610065, China

IJERPH, 2019, vol. 16, issue 22, 1-14

Abstract: The improvement of China’s new energy automobile technology is one of the most pressing issues for the government and manufacturers, given that the existing new energy automobile subsidy policy is about to be withdrawn completely. Considering that the manufacturer has the private information of the initial technology level of new energy vehicles, its technology can be improved by means of technological innovation. Using principal–agent and regulation theory, this paper studies how the government designs incentive contracts to motivate manufacturers to strive to upgrade new energy automotive technology. The study has obtained a quantitative incentive contract under full information and a quantitative screening contract with asymmetric information, which provides an effective reference for the design of government subsidy contracts. It was found that the existence of asymmetric information reduces the expected net utility of the government in incentive projects, and the technology upgrading of low-level manufacturers is insufficient, but will not affect the technology upgrading of high-level manufacturers who will get information rent. The conclusion has good reference value and guiding significance for government policy-making with asymmetric information.

Keywords: asymmetric information; new energy vehicles; technological innovation; incentive contracts (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.mdpi.com/1660-4601/16/22/4544/pdf (application/pdf)
https://www.mdpi.com/1660-4601/16/22/4544/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jijerp:v:16:y:2019:i:22:p:4544-:d:287869

Access Statistics for this article

IJERPH is currently edited by Ms. Jenna Liu

More articles in IJERPH from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().