Supply Chain Adverse Selection Contract Research Under Supply Chain Information Update

With the development of economy and the increasingly fierce marketcompetition, market demand diversity, the production cycle is shortened.Asymmetric information between supply chain organizations and theircoordination has become a hot problem in the study of supply chain coordination.In order to meet the demand of market in time, they tend to be signed Multi-stagelong-term cooperation agreement. However, with the cooperation stagepropulsion, the information structure and organization structure in the supplychain both are likely to change, the asymmetry information on the effects ofincentive and coordination of supply chain is also more diverse. And as thecooperation period becomes longer, Supplier selection retailer with informationscreening is a long time game relation with multiple phase information updateunder Multi-stage asymmetric information. Therefore, research the supply chainadverse selection contract about dynamic change, multi-stage long-termcooperation and information update under the asymmetric information has arealistic significance.Firstly, analyses the information update mechanism of long-term productsales in the supply chain composed of a supplier and a retailer by using theprinciple of the Bayesian updating. Establish an information update the model, toexplore the information update of market types which is private information forthe retailer; the update of the supplier’s belief about the retailer to disclose thereal market information; and realized the supplier’s belief function trend undereach relevant parameter change by numerical simulation with Mathematica.Secondly, Based on the understanding of the information update mechanismof the market, expanded the supply chain cooperation from a two-stage tothree-stage on the basis of previous studies. In the final stage of cooperation, theparties in the supply chain will game strategy only based on the interests of thisstage; but consider the benefits of subsequent stages in the other stage, set up athree-stage adverse selection contract model under the asymmetric information.Get the quality of the products bring the best interests, and analysis therelationship and significance of them by numerical simulation. Thirdly, summarize the previous model, research the establishment ofmulti-stage of adverse selection contract model under the asymmetric information.With retailers to disclose information more and more, the degree of asymmetricinformation between the parties is reduced, establish two multi-stage of adverseselection contract model, one is Full-commitment contract, the other isRe-negotiation contract. And analysis the change trend of the quality of theproducts by numerical simulation.Fourthly, compare Full-commitment contract and Re-negotiation contract byMathematica and List analysis. Through three aspects: the quality of the products,supplier income, and the system loss reduction which is inevitable under theasymmetric information. Comprehensive conclusion, the Re-negotiation contractis the best choice for both sides of Principal-agent in the multi-stage cooperation,under the asymmetric information.Finally, the research contents are summarized and evaluation, and proposedthe further research direction.