INCENTIVE SYSTEM AND EDUCATIONAL PERFORMANCE - ANALYSIS OF 3-LEVEL HIERARCHY MODEL IN GAME-THEORY

Numerous attempts have been made by scholars to show the decline of ed ucational performance. And it is the main cause of the default of educ ational contents. However, only few attempts have so far been made at incentives of a supervisor and an agent. The purpose of this paper is to explain the cause of the decline of educational performance and to describe policy prospecting for promoting the quality of school. This research borrows a considerable amount from Tirole (1986). Added to th is, I use ''multi-stage games'' to solve the previous problems. The ma in results are the following: 1 The minimum level of educational perfo rmance is achieved if a salary is paid independent of his effort or ed ucatinal performance. 2 The optimal level of educational performance i s achieved under symmetric information if a salary is depended on an a gency's effort (First Best). 3 The optimal level of educational perfor mance is achieved under asymmetric information if a salary is depended on educational performance (Second Best). 4 If a supervisor colludes with an agency, a principal must make a contract coalition-proof.