A Study on Confirmation Model of Surplus Profit Sharecropping in Light of Monitoring Cost and Self-Discipline Level

In reality, when the manager influences the production of corporations in an inestimable way, the more self-disciplined he is, the more dependent his income is on the enterprise's production and the more unlikely he is directly monitored. However, the traditional confirmation model of surplus profit sharecropping neglects monitoring strength, monitoring cost and the manager's self-discipline. On the basis of constructing and analyzing a theoretical model, the present thesis obtains ß, an incentive ratio, which includes monitoring cost implicitly, and reflects monitoring strength, is relevant to the manager's self-discipline and has some effect on explaining practical limitations of high salary incentive contract for senior executives.