Incentive analysis of labour dispatch under asymmetric information theory

Yanli Yang, Xianyu Wang

School of business, Sichuan University, Chengdu, 610000, Sichuan, China

Under the circumstances of the fierce market competition, great importance is attached to labour dispatch as an innovative employment way since it saves more labour costs for enterprises. However, there exists obvious asymmetric information among the dispatched employees, employers and accepting entities. This paper makes an analysis of the incentive offered by accepting entities to the dispatched employees and employers under the circumstances of asymmetric information and symmetric information. It verifies through models that in the case of symmetric information accepting entities can offer incentive to the dispatched employees and employers so as to achieve Pareto optimality by means of linear contracts. In case of asymmetric information, the expected revenue of accepting entities will be influenced by the abilities, degree of risk aversion and effort costs of the dispatched employees and employers, which is of great reference value to the enterprise practice.