Improve the Incentive Mechanism Base on Boxed-pigs Game Model

Abstract

An effective incentive mechanism is very important for all countries and companies, whether it is the innovation incentive mechanism for small and medium-sized enterprises or the work incentive mechanism for employees. However, the general incentive mechanism will have the problem of ineffective incentive, which needs to be improved and optimized. The failure of incentive mechanism will lead to the lack of enthusiasm of small and medium-sized enterprises that have no competitive advantage in technological innovation, and will also lead to the lack of work motivation of employees, resulting in low work efficiency and other problems. This paper analyzes real life cases through the theory of the Boxed-pigs game model. The boxed-pigs game is a classic example of a failed incentive mechanism. The big pig and the small pig in the model vividly represent the two opposing roles in real life. In different situations, the big pig and the small pig will make different strategies. By changing the conditions in the model and considering the reality, we can get solutions to improve the actual problems, such as tax incentives, employee compensation incentives, etc. Hope to improve the ineffective incentive mechanism.