A Study On Supply Chain Principal-agent Risk Elusion Strategy

The difference of goals and responsibilities among the supply chain members results in disaccord between their local interests and the supply chain goal. With that has brought about the decline of the supply chain performance. Issues of how to design the cooperation mechanism to harmonize the supply chain performance have arouse a growing interest among both academics and practitioners.In this dissertation, we do research on supply chain problems with information asymmetry based on the the theory of principal-agent. Though proposing the problem, expatiating the basic theory, analyzing the problem, solving the problem, we have a systemic analysis on the supply chain problems with information asymmetry, which is moral hazard problem and adverse selection problem. This paper solves the low efficiency of the supply chain resulting from information asymmetry by and large.The information asymmetry is an essential character of the supply chain, which has an important effect on the supply chain coordination. So the research on supply chain contracts will be more practical when we consider the effect of the information asymmetry. Two important problems of principal-agent theory, moral hazard and adverse selection problem are researched, and important models are given out respectively. First, the problem of a manufacturer incentives its supplier to work hard at research and development (R&D in short) in order to reduce the supplier's unit cost through ex ante contract and linear regulation concerning rewards is studied when the supplier's R&D effort can't be observed and so moral hazard exists.