Research On Seller 's Consumer Credit Coordination Mechanism Based On Income Sharing Contract

In the macro perspective, the development of consumer credit not only can expand domestic demand, stimulate consumption and upgrade of industrial structure, but also can improve competitiveness and market share in the supply chain, increase a profitable access for financial institutions and improve the life quality of consumers at the level of micro. With the sustained rapid growth of the domestic economy, the constantly improvement of the consumer credit policy, regulation and the social credit system, changes in consumer attitudes and the widespread use of credit card, and online shopping installments, the seller’s consumption credit has become a competitive advantage weapon of expanding supply chain companies and an earnings channel of financial institution. For example, in the electronic appliance industry, Suning cooperated with HP, Sharp, Sony, Skyworth, Haier, Siemens and others companies since 2006 to develop consumption credit activities. The sale proportion of Suning through consumer credit will reach 30% in 2015.Therefore, based on analyzing the characteristics of the seller consumer credit by the basis of game theory, establishing relevant quantitative analysis models to guide the retailer and the financial institution, which are helping them to make optimal choices in a decentralized decision-making and centralized decision-making situation. The decision variable of the financial firm is an interest-fee rate, and the decision variable of the retailer is an interest-fee subside rate. The financial firm decides interest-fee rate in advance, and then the retailer decides interest-fee subsidies. Meanwhile, this paper presents a revenue sharing contract which makes two companies to achieve a win-win situation.The significance of the research has two aspects:firstly, this paper focuses on studying the seller’s consumption credit system, which consists single retailer and single financial institution from the perspective of supply chain at the aspect of theory; secondly, this paper studies the seller’s consumption credit system, which can enhance management decision-making level of retail enterprises and develop the consumption credit business of financial institutions at the aspect of practice.Firstly, this paper studies the coordination system of seller’s consumption credit considering independent demand. The decision variable of the financial firm is an interest-fee rate and service level, and the decision variable of the retailer is an interest-fee subside rate. Meanwhile, this paper respectively establishes the decentralized decision-making model, centralized decision-making model and revenue sharing contract model. Through solving these models and logical reasoning analysis, the following important conclusions could be drawn: the consumption credit system achieves Pareto improvement when the revenue sharing coefficient of the retailer with the financial firm in a certain range; the consumption credit system achieves coordination as the retailer sharing all of its revenue to the financial firm. Finally, the numerical analysis method is applied to verify the effectiveness of the above models and conclusions.Secondly, this paper studies the coordination system of seller’s consumption credit considering demand mutual shifting. Through solving these models and logical reasoning analysis, the following important conclusions could be drawn:when the retailer shares all of its revenue of credit consumption with the bank, the consumption credit system will achieve coordination, but achieve win-win coordination can only be realized when the bank further shares part of it’s coordination profit with the retailer. Finally, the numerical analysis method is applied to verify the effectiveness of the above models and conclusions.Thirdly, this paper studies the coordination system of seller’s consumption credit considering repudiation risk. Through solving these models and logical reasoning analysis, the following important conclusions could be drawn: when the retailer shares specific ratio of its revenue of credit consumption with the bank, the consumption credit system will achieve coordination, but the perfect win-win coordination could be realized when the bank further shares part of it’s coordination profits with the retailer. Finally, the numerical analysis method is applied to verify the effectiveness of the above models and conclusions.Finally, based on the above findings, it is offering some suggestions on the theory and practice of retail enterprises to improve their management decision-making level and the financial institutions enhance their consumer credit business. Meanwhile, this paper points out the deficiencies, limitations and the future trends of the research.