Reliability management model based on principal-agent mechanism

Abstract

The paper analyzes the problem of inefficient allocation of reliability resources in the terms of public goods under traditional regulatory environment, which is resulted from power enterprises' monopoly status and the lack of customers' involvement. To improve the efficiency of allocation, this paper applies principal-agent mechanism into the relationship of customers and power enterprises, and then studies the configuration of key parameters of incentive contract and the influence over the power companies' effort from the information perspective. In addition, the decision-making behaviors of agent, participation of principal and dynamic relationship of the corresponding contracts, are analyzed modally. Numerical results show that different incentive contracts can guide power enterprises to maintain and guarantee the tendency to the optimal level of power system reliability which are designed by customers according to the different information states and risk attitudes. Furthermore, it is proved that the mechanism can fully reveal the reliability demand information and promote the optimal allocation of reliability resources.