Research On Incentive Efficiency Of Exclusive And Common Agency In Supply Chain

Contract management plays an important role in the supply chain management.Members of the supply chain establish contractual relations to coordinate the interests of both sides.Due to the uncertainty of the external environment,information asymmetry and incomplete information,the terms of the contract is incomplete.Most of the traditional supply chain contract research only considers the efforts of agents,which ignore the fact that in the supply chain management process agents and principals' efforts are both important.The exclusive agency and common agency model are basic models in the principal-agent theory.This paper tries to introduce the exclusive agency model and the common agency model to analyze incentive effects of the supply chain suppliers and retailers.Comparing the incentive levels of the supply chain suppliers and retailers between the two models is the main starting point of this paper.The vertical integration of the supply chain has become more and more common in the supply chain development.In the context of Ownership separation,the supplier is to choose the exclusive agency or common agency model to maximize their own interests is the ultimate goal of this paper.This article also attempts to construct and solve the model to allow readers to have a general understanding of the differences between the two models.And then we consider the case of the efforts of retailers as well as the efforts of suppliers in the supply chain management.We obtain the equilibrium solution and compare the different levels of incentive efficiency.Our analysis put a theoretical basis in depth for supply chain management,which not only enriches the research field of supply chain management and contract design,but also provides a useful reference for decision-making in the supply chain management process.