In the risk investment system, whether the double principal-agent relationship which is formed by different interest subjects can smoothly operate is the key to determine the success of risk investment, yet the issue of information asymmetry in the field is more serious than other industry, so that double principal -agent relationship formed in it exists huge risks. A series of binding agreements and institutional arrangements can be reached among different interest subjects and strictly observed by all game parties, then this cooperative game can make the parties have sustained and stable income, and reached the win-win cooperation of game with incomplete information, so as to effectively restrain the double principal-agent risk.
Key words-Double Principal-agent risk;Adverse selection;Moral hazard;Game analysis;Risk investment
I. OPERATION OF RISK INVESTMENTRisk investment, also called venture capital, refers to a investment way of venture capital invested in high-tech enterprises or high-risk enterprises in order to obtain high incom. Risk investment system take the capital flow as a tie which the capital flow to the capital operator (venture capitalists) from capital provider (investor), and then is invested in venture company (entrepreneur). Which formed the double principal-agent relations: First, the principal-agent between the investor and the venture capitalist; second, the principal-agent between venture capitalist and entrepreneur (venture entrepreneur), thus generate corresponding principal-agent risks
II. ANANLYSIS ON DOUBLE PRINCIPAL-AGENT RISK AMONG THE RISK INVESTMENT SYSTEMThe basic reason of causing agency risk is the information asymmetry between principal and agent-side, generally including two types of "adverse selection" and "moral hazard", which is respectively determinated by the two types of information asymmetry: first, "hidden information", that is one of the two trading parties understand the relevant information while the other do not know this information, second "hidden behavior", that is, one of the two trading parties could not grasp the true behavior of the other party.
A. Agency risk1:Agency risk between the investors and risk capitalist under the first contractual arrangementIn the first level of the agency risk, investor is the client, being at the owner (relative information disadvantage) status; risk capitalist is the agent, being at the operator (relative information advantage) status, this principal-agent relationship relies on the risk investment company to exist.
1) Adverse selectionInvestor give up the right of assets and relegate it to the risk capitalist to manage and operate, however, the "quality" of risk capitalist is difficult to direct understand and fully grasp by investor (or say that the information cost is too high and is not feasible in economy), in order to raise better venture capital, they often tend to exaggerate the level of professional management and honesty character and hide the insufficient of capacity. Therefore, Investor can only pay the price bas...