Based on the brief analysis of the theory, we analyze the governance effect of the dynamic allocation of control rights and contingent transfer mechanism through an experiment and show that the dynamic allocation of control rights and contingent transfer mechanism are benefit for limiting the manager’s private benefits and protecting the investors’ return. While, the more the control transfers, the less effort the manager spends in private benefits and the more in the firm’s value. We also show that given more perfect external information revealed and monitoring mechanism, the governance effect of the dynamic allocation of control rights and contingent transfer mechanism will be improved more notable.