Regulation on Energy Industry in China under AsymmetriccInformation

This paper studies the implementation of a regulation problem of China in which the energy industry's private information is unknown to the state-owned assets supervision and administration commission of the state council (SASAC). It's reasonable to use a fuzzy variable to denote the subjective assessment of the SASAC to the private information. A principal-agent model is then set up to maximize the welfare of the SASAC. Pontryagin maximum principle is adopted in this paper to obtain the necessary condition of the optimal solutions.