Game-Theoretic Model of Principal–Agent Relationship Application in Corporate Tax Policy Design

Abstract

The paper considers game-theoretic model of principal–agent relationship application in corporate tax policy design and emphasizes the corporate tax policy issues because modern economics is built on corporations and it is essential to manage the whole corporate structure as a whole unit. This research is dedicated to the choice of a set of optimal strategies, which compose corporative tax policy, with the use of coalition model to decision-making process. In daily routine, every enterprise faces the problem of effective allocation of assets. The solution of this problem is usually related to the complexity of stated plan (project) and a set of condition in which the plan can be accomplished. It is obvious that the results of each project (or even variety or type of action) differ and depend on condition (either internal or external). Every organization is challenged with uncountable impacts. And the degree of influence of each impact is depended on strategy organization chosen. We analyze tax impact, and solve the problem of effective tax policy design within principal–agent theory.