| Taking the classic principle-agent theory and the relevant psychological theories as research basis, the overconfident psychological preference of CEO as research start point, the decision behaviors of shareholders and CEOs as research focus, the effort output risk, effort observability, and risk attitude as research main line, this dissertation constructs theoretical model with considering CEO's overconfidence, and thoroughly probes into the problem of the designing CEO's compensation contract for the shareholder, and then applies experimental methods to design economic experiments, in order to test the principal-agent model induced into CEO's overconfidence psychology.Overconfidence is "the most steady finding in psychology", and one of the emotional factors and mental factors influencing economy man to decide. Although great of propositions have studied on overconfidence, how to test them using field data is still faced with obstacle, because overconfidence level can't be evaluated accurately in real world. Based Berg et al (1986), by using experimental methods to control the relationship between trade units and probability, experimenter can control each preference function to induce participant to behave as their real preference. Based on the precondition that CEO is overconfident, this dissertation is established in extending the assumption of "homo economics" in classical principle-agent theory and constructs new theoretical model. Referring adequately researches of experimental economics in western countries and applying the computer experimental system, it controls laboratory conditions according to theoretical assumption and recruits participants to decide in fictitious principle-agent settings, and then tests the theory found on overconfidence by analyzing the experimental data.There are many factors influencing the principal-agent relationship. Choosing three vita factors of effort output risk, effort observability, and risk attitude from them as our research subjects, this dissertation focuses on how both principles and agents decide when they change. We extend our researches along with the consecution as follows: firstly, construct the principle-agent model between the shareholder and overconfident CEO; secondly, design and run experiments according to the theoretical propositions; finally, draw conclusions after analyzing the experimental data.This dissertation extends researches based on the above consecutions and draws the basic conclusions as follows: 1. Not only that subject's actions in the repeated experiments convergence into the optimal action but also that the predicted optimal actions are significantly different from other non-optimal ones. The theoretical model is tested effectively and has some validity and significance in a certain extent. 2. Overconfidence has no significant relativity with risk attitude, man is more preferable risk and more overconfident. 3. The shareholders design different compensation contracts for different overconfident CEO when the conditions as risk level, moral hazard and CEO's risk attitude vary.Based on the basic conclusion, there are following two contributions in this dissertation:1. In theory, the basic assumption of the classical principal-agent theory that CEO is rational is extended, and CEO is assumed to be overconfident here in chapter 3, 4, 5. Three factors of risk level, moral hazard and CEO's risk attitude are considered into optimal compensation contract design for overconfident CEO under different conditions. It not only expands classical principle-agent model but also describes the relationship between shareholders and CEOs more clearly and actually.2. In method, experimental methods to address on principle-agent frame systematically through designing a series of economics experiments and making all experimental programs are used. The optimal solutions of extended theoretical models in chapter 3, 4, 5 are tested respectively. That makes it possible to control CEO's different overconfidence level and provides effective empirical supports to theoretical models and offers more practical suggestions and more forceful academic evidences.
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