Abstract: Information sharing is particularly important to improve the whole performance of the supply chain, but for the partners of the supply chain, there are not enough incentive to do it. In this paper, a two stage multi-task principal-agent model is presented to research the optimal incentive on supply activity and information sharing from the core company in the supply chain to it's partner, and this model is also used to explain the continued improving progress of the partnership in supply chain. The conclusion shows that the marginal substitution rate of the supplier's effort cost is critical in the incentive of the information sharing and the supply activity.

Key words: supply chain management, information sharing, multi-task principal-agent