Abstract:

This study focuses on the incentive mechanism of collaborative technology innovation of mega projects. To analyse the impact of fairness preference on the design of incentive mechanism, this study discusses four situations based on the principal-agent theory: both sides have fairness preference, both sides are self-interested, the agent has fairness preference, and the owner has fairness preference. The results reveal that when the fairness preference of the two sides is not equal, the optimal incentive coefficient is positively correlated with the agent's fairness preference, while negatively correlated with that of the owner. When the fairness preference of the two sides is equal, the fixed payment changes negatively with the fairness preference, and the output contribution rate changes the influence of fairness preference on the incentive coefficient. The final performance is that the output sharing proportion obtained by the side with the lower contribution rate is positively correlated to fairness preference, but not more than 0.5. The numerical modelling shows that the gap between two sides' fairness preference is beneficial to the improvement of the owner's utility, but a wide gap is unfavorable to the total profit.

Key words: mega projects, collaborative technology innovation, fairness preference, principal-agent theory