Study on principal-agent problem with competitive multiple retailers in production distribution system

摘要

The problem of how manufacturers incite their retailers with competition to offer high service level is studied. Manufacturers (principals) have asymmetric information about retailers' (agents) service level,which is private information of the latter. Because of substitutability of products,multiple retailers have competition. We applied the principal-agent theory to our analysis and proposed two models under symmetric and asymmetric information respectively. The results reveal that retailers' service level increase with the increase of the degree of competition,i. e.,competitive pressure is a driving force for improving retailers' service level. Further,comparing of the two kinds of contracts,we know that principals' profits decrease monotonously with the increase of the degree of competition under symmetric information but increase firstly then decrease under asymmetric information,i. e.,competition between retailers reduces manufacturers' loss. In addition,the analysis on information value is carried out. The results indicate that information value increases with the increase of the influencing coefficient of service level on outputs,retailers' degree of risk aversion and exogenous uncertainty,but decreases with the increase of the degree of competition. All these results reveal that competition between retailers can weaken the influence of asymmetric information on manufacturers' profit and manufacturers will obtain benefits by making proper use of competition.