The Research On Budgeting Management Based On Contract Theory

Contract is agreement or promise about the exchange of economy right, which is managed between party and party on the premise of freedom, equality and autonomy of the will, in order to improve on each economic position and economic expection. As the fundamental means that regulates various socioeconomic relations, contract gives a great push forward to social development, it is one of the best method discovered so far by human that can construct interpersonal relationship, stabilize conflict and level out the differences. Management of budgeting is a mechanism of contract, which has several functions, such as, planning, control, coordination, motivation and evaluation. The true nature of the budget management is bargaining among subjects of interest. Based on the idea, the thesis employs contract theory to research budget management. Firstly, it studies the basic principles,that is,the formation and evolution of the concept and basic functions of contracts. From the angle of principle-agent relation and the corporate governance structure, in this paper, we mainly expound the contract nature of budget management, and discuss its economic functions. Secondly, the dissertation analyses the process of designing and mechanism to perfect of budgeting,the budget is a bargaining activity,"Nash equilibrium"is the rule and criterion of budgeting. And then, we study how the mechanism of budgetary contracts operate in the practice. Lastly, it probes into the reasons of budgetary slack, and applies evolutionary game theory under bounded rationality to explain the slack, and brings forward suggestion solving budgetary slack.