In this study, we construct an incentive model under which the optimal wage incentive scheme is a linear contract. This linear incentive contract can induce truth telling by workers about their inefficiency types and promote optimal efforts by them. We use the non-parametric kernel estimation method to estimate the model primitives to analyse the insufficient efforts in the Chinese labour market. The empirical results based on data collected from the China Health and Nutrition Survey show that efficient male workers in white-collar occupations do not exert sufficient efforts in the Chinese labour market. And wages for male workers in white-collar occupations are undervalued.

We empirically analyse the authenticity of the information provided by Chinese listed corporations. First, we construct a signalling game among listed corporations and investors. We obtain the behaviours, which are positive strategic interactions on the amounts of stock issue and positive correlation between stock issuance and profit, of listed corporations when they provide untrue information. Second, by using the dataset of 2,408 listed corporations in 2016 from CCER China Economic and Financial Database, we prove that the optimal amounts of stock issue by maximizing the amounts of financing increase as the profits of listed corporations raise. And by applying single index estimation method, our parameter estimation results show that the strategic interactions among 2,408 Chinese listed corporations on the amounts of stock issue are positive. Therefore, there exists Chinese listed corporations who do not tell the truth in proving their information. Further analysis shows that 485 out of 2,408 Chinese listed corporations do not tell the truth in providing their profits. And most of the Chinese listed corporations with unauthentic declared profits report their profits lower than their true profits to reduce tax. And those who overstate their profits are large and medium enterprises from the first and second industries.