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Articles

Incentive Mechanism of Closed-Loop Supply Chain under Double Information Asymmetry

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  • 1. School of Management, China University of Mining and Technology, Xuzhou 221116, China;
    2. School of Management, Guangdong University of Technology, Guangzhou 510520, China

Received date: 2015-05-31

  Revised date: 2015-11-25

  Online published: 2016-12-27

Abstract

Aimed at the closed-loop supply chain constituted by the remanufacturer, the collector and consumers in the market of waste electronic products, this paper researches that how the remanufacturer handles the adverse selection problem with the collector's collecting ability hidden and deals with the moral hazard problem with his effort level hidden. Though using incentive theory, how does the remanufacturer design the incentive mechanism, guiding the collector to collect the waste electronic products under the dual information asymmetry, is studied in this paper. The fact is that only a part of products collected can be used to remanufactured, so the incentive mechanism model of closed-loop supply chain under agent framework is constructed, according to the principal-agent theory, by using the principle of information screening. In addition, the model is solved, and the influence of the related factors on the degree of effort is discussed. Besides, through numerical simulation, we further validate the effect of related factors on screening contract parameters and the expected profit. The results showed that royalty coefficient of the number of remanufactured products, which low collecting ability collector gains, is downward distortion. To get retained profits, he has to report true type of collecting ability. The collector, with high collecting capacity, not only can get retained profits, but also can have additional information rent. The remanufacturer, signing high ability collector, can obtain more profit than that, signing the low ability collector. With the increase of the proportion of high capacity in the market, the manufacturer can obtain more profits by signing high ability collector.

Cite this article

WANG Wen-bin, ZHAO Xue-juan, ZHANG Peng, LU Zhen-ye, CHENG Ming-bao . Incentive Mechanism of Closed-Loop Supply Chain under Double Information Asymmetry[J]. Chinese Journal of Management Science, 2016 , 24(10) : 69 -77 . DOI: 10.16381/j.cnki.issn1003-207x.2016.10.008

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