The risk of investment in principal agent problem

This thesis discussing about investors and capitalists,capitalists and entrepreneurs respectively in two parts,discussing the relationship between them with principal-agent theory.For discussing the principal-agent problem between venture investors and venture capitalists,this thesis emphasize the reputation utility as one forms of implicit incentives.Whether we can achieves Pareto optimality between venture investors and venture capitalists I analyse it through a mathematical model,and I get the answer that only though the explicit incentive mechanism,Pareto optimality can not be reached.For discussing the principal-agent problem between venture capitalists and venture entrepreneurs,I am establishing moral risk game model,to solve and analysis it.