Abstract:

Based on the principal-agent model of a single oil production plant and two reservoir management districts，we
studied the impact of competitive relationship between reservoir management districts on the information value of investment
and agency costs of oil production plant，the impact of possible collusive behavior between reservoir management districts and
the preventive measures of oil production plant on investment incentives. The conclusions are as follows: firstly，in order to
reduce the uncertainty of investment returns，oil production plants should try to collect market information about investment
in oil projects instead of blindly requiring risk aversion of reservoir management districts；secondly，oil production plants
can benefit from intense competition between reservoir management districts，and hence reduce the agency costs；thirdly，
oil production plants should deter collusion behavior between reservoir management districts by means of additional fines or
demotion，etc.

Key words: oil production plant, reservoir management, investment risk, incentive mechanism, competitive relation