IDEAS home Printed from https://ideas.repec.org/a/gam/jijerp/v16y2019i22p4544-d287869.html
   My bibliography  Save this article

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

Author

Listed:
  • 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)

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for the government and manufacturers, given that the existing new energy automobile subsidy policy is about to be withdrawn completely.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.

Suggested Citation

  • Dong Cai & Chunxiang Guo & Yue Tan, 2019. "Design of Incentive Contract for Technological Innovation of New Energy Vehicles with Asymmetric Information," IJERPH, MDPI, vol. 16(22), pages 1-14, November.
    • Handle: RePEc:gam:jijerp:v:16:y:2019:i:22:p:4544-:d:287869
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1660-4601/16/22/4544/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1660-4601/16/22/4544/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Zhaohua Wang & Xiaoyang Dong, 2016. "Determinants and policy implications of residents’ new energy vehicle purchases: the evidence from China," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 82(1), pages 155-173, May.
    2. Laffont, Jean-Jacques & Tirole, Jean, 1986. "Using Cost Observation to Regulate Firms," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 614-641, June.
    3. Aadhaar Chaturvedi & Victor Martínez-de-Albéniz, 2011. "Optimal Procurement Design in the Presence of Supply Risk," Manufacturing & Service Operations Management, INFORMS, vol. 13(2), pages 227-243, May.
    4. Gass, V. & Schmidt, J. & Schmid, E., 2014. "Analysis of alternative policy instruments to promote electric vehicles in Austria," Renewable Energy, Elsevier, vol. 61(C), pages 96-101.
    5. Li, Yaoming & Zhang, Qi & Liu, Boyu & McLellan, Benjamin & Gao, Yuan & Tang, Yanyan, 2018. "Substitution effect of New-Energy Vehicle Credit Program and Corporate Average Fuel Consumption Regulation for Green-car Subsidy," Energy, Elsevier, vol. 152(C), pages 223-236.
    6. Li, Wenbo & Long, Ruyin & Chen, Hong, 2016. "Consumers’ evaluation of national new energy vehicle policy in China: An analysis based on a four paradigm model," Energy Policy, Elsevier, vol. 99(C), pages 33-41.
    7. Liu, Yingqi & Kokko, Ari, 2013. "Who does what in China’s new energy vehicle industry?," Energy Policy, Elsevier, vol. 57(C), pages 21-29.
    8. Cailou Jiang & Ying Zhang & Maoliang Bu & Weishu Liu, 2018. "The Effectiveness of Government Subsidies on Manufacturing Innovation: Evidence from the New Energy Vehicle Industry in China," Sustainability, MDPI, vol. 10(6), pages 1-11, May.
    9. Shafiei, Ehsan & Davidsdottir, Brynhildur & Fazeli, Reza & Leaver, Jonathan & Stefansson, Hlynur & Asgeirsson, Eyjolfur Ingi, 2018. "Macroeconomic effects of fiscal incentives to promote electric vehicles in Iceland: Implications for government and consumer costs," Energy Policy, Elsevier, vol. 114(C), pages 431-443.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ma, Miaomiao & Meng, Weidong & Li, Yuyu & Huang, Bo, 2023. "Impact of dual credit policy on new energy vehicles technology innovation with information asymmetry," Applied Energy, Elsevier, vol. 332(C).
    2. Congli Su & Mingxi Wang, 2022. "Quality incentive contract design in government procurement for innovation," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3665-3684, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Weidong Meng & Ye Wang & Yuyu Li & Bo Huang, 2020. "Impact of product subsidies on R&D investment for new energy vehicle firms: Considering quality preference of the early adopter group," PLOS ONE, Public Library of Science, vol. 15(7), pages 1-14, July.
    2. Zhang, Lei & Qin, Quande, 2018. "China’s new energy vehicle policies: Evolution, comparison and recommendation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 110(C), pages 57-72.
    3. Jianlong Wu & Zhongji Yang & Xiaobo Hu & Hongqi Wang & Jing Huang, 2018. "Exploring Driving Forces of Sustainable Development of China’s New Energy Vehicle Industry: An Analysis from the Perspective of an Innovation Ecosystem," Sustainability, MDPI, vol. 10(12), pages 1-24, December.
    4. Fansheng Meng & Xiaoye Jin, 2019. "Evaluation of the Development Capability of the New Energy Vehicle Industry: An Empirical Study from China," Sustainability, MDPI, vol. 11(9), pages 1-19, May.
    5. Na Zhou & Qiaosheng Wu & Xiangping Hu, 2020. "Research on the Policy Evolution of China’s New Energy Vehicles Industry," Sustainability, MDPI, vol. 12(9), pages 1-17, May.
    6. Wang, Zhongcheng & Li, Xinyue & Xue, Xinhong & Liu, Yahuan, 2022. "More government subsidies, more green innovation? The evidence from Chinese new energy vehicle enterprises," Renewable Energy, Elsevier, vol. 197(C), pages 11-21.
    7. Dong, Feng & Liu, Yajie, 2020. "Policy evolution and effect evaluation of new-energy vehicle industry in China," Resources Policy, Elsevier, vol. 67(C).
    8. Siran Fang & Xiaoshan Xue & Ge Yin & Hong Fang & Jialin Li & Yongnian Zhang, 2020. "Evaluation and Improvement of Technological Innovation Efficiency of New Energy Vehicle Enterprises in China Based on DEA-Tobit Model," Sustainability, MDPI, vol. 12(18), pages 1-22, September.
    9. Chen, Yufeng & Ni, Liangfu & Liu, Kelong, 2021. "Does China's new energy vehicle industry innovate efficiently? A three-stage dynamic network slacks-based measure approach," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    10. Cailou Jiang & Ying Zhang & Maoliang Bu & Weishu Liu, 2018. "The Effectiveness of Government Subsidies on Manufacturing Innovation: Evidence from the New Energy Vehicle Industry in China," Sustainability, MDPI, vol. 10(6), pages 1-11, May.
    11. Weixing Liu & Hongtao Yi, 2020. "What Affects the Diffusion of New Energy Vehicles Financial Subsidy Policy? Evidence from Chinese Cities," IJERPH, MDPI, vol. 17(3), pages 1-15, January.
    12. Li, Chengjiang & Negnevitsky, Michael & Wang, Xiaolin & Yue, Wen Long & Zou, Xin, 2019. "Multi-criteria analysis of policies for implementing clean energy vehicles in China," Energy Policy, Elsevier, vol. 129(C), pages 826-840.
    13. Peng Yu & Jian Zhang & Defang Yang & Xin Lin & Tianying Xu, 2019. "The Evolution of China’s New Energy Vehicle Industry from the Perspective of a Technology–Market–Policy Framework," Sustainability, MDPI, vol. 11(6), pages 1-14, March.
    14. Wu, Zezhou & He, Qiufeng & Li, Jiarun & Bi, Guoqiang & Antwi-Afari, Maxwell Fordjour, 2023. "Public attitudes and sentiments towards new energy vehicles in China: A text mining approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 178(C).
    15. Yuan, Xueliang & Liu, Xin & Zuo, Jian, 2015. "The development of new energy vehicles for a sustainable future: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 298-305.
    16. Hu, Zheng & Yuan, Jiahai, 2018. "China’s NEV market development and its capability of enabling premium NEV: Referencing from the NEV market performance of BMW and Mercedes in China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 118(C), pages 545-555.
    17. Wenbo Li & Ruyin Long & Hong Chen & Feiyu Chen & Xiao Zheng & Muyi Yang, 2019. "Effect of Policy Incentives on the Uptake of Electric Vehicles in China," Sustainability, MDPI, vol. 11(12), pages 1-20, June.
    18. Qingjie Wang & Jing Ma & Lei Shang & Shuangyin Chen, 2022. "Analysis of the Effects of Grid-Connected Charging/Discharging Stations on Relay Protection," Energies, MDPI, vol. 15(23), pages 1-17, November.
    19. Wenbo Li & Ruyin Long & Hong Chen & Jichao Geng, 2017. "Household factors and adopting intention of battery electric vehicles: a multi-group structural equation model analysis among consumers in Jiangsu Province, China," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 87(2), pages 945-960, June.
    20. Zhu, Lijing & Wang, Peize & Zhang, Qi, 2019. "Indirect network effects in China’s electric vehicle diffusion under phasing out subsidies," Applied Energy, Elsevier, vol. 251(C), pages 1-1.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jijerp:v:16:y:2019:i:22:p:4544-:d:287869. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.