Innovations in Defense Acquisition: Asymmetric Information and Incentive Contract Design

2009 ◽  
Author(s):  
Peter J. Coughlan ◽  
William Gates
Keyword(s):  
Asymmetric Information ◽  
Contract Design ◽  
Incentive Contract ◽  
Defense Acquisition

scholarly journals Incentive Contract Design for the Water-Rail-Road Intermodal Transportation with Travel Time Uncertainty: A Stackelberg Game Approach

Entropy ◽  
2019 ◽  
Vol 21 (2) ◽  
pp. 161
Author(s):  
Wenying Zhang ◽  
Xifu Wang ◽  
Kai Yang
Keyword(s):  
Asymmetric Information ◽  
Travel Time ◽  
Design Problem ◽  
Stackelberg Game ◽  
Contract Design ◽  
Incentive Contracts ◽  
Optimal Time ◽  
Incentive Contract ◽  
Intermodal Transportation ◽  
The Impact

In the management of intermodal transportation, incentive contract design problem has significant impacts on the benefit of a multimodal transport operator (MTO). In this paper, we analyze a typical water-rail-road (WRR) intermodal transportation that is composed of three serial transportation stages: water, rail and road. In particular, the entire transportation process is planned, organized, and funded by an MTO that outsources the transportation task at each stage to independent carriers (subcontracts). Due to the variability of transportation conditions, the travel time of each transportation stage depending on the respective carrier’s effort level is unknown (asymmetric information) and characterized as an uncertain variable via the experts’ estimations. Considering the decentralized decision-making process, we interpret the incentive contract design problem for the WRR intermodal transportation as a Stackelberg game in which the risk-neutral MTO serves as the leader and the risk-averse carriers serve as the followers. Within the framework of uncertainty theory, we formulate an uncertain bi-level programming model for the incentive contract design problem under expectation and entropy decision criteria. Subsequently, we provide the analytical results of the proposed model and analyze the optimal time-based incentive contracts by developing a hybrid solution method which combines a decomposition approach and an iterative algorithm. Finally, we give a simulation example to investigate the impact of asymmetric information on the optimal time-based incentive contracts and to identify the value of information for WRR intermodal transportation.

Incentive contract design in competing distribution channels

2009 ◽  
Vol 20 (4) ◽  
pp. 295-305 ◽  
Author(s):  
Changxian Liu ◽  
Houping Tian ◽  
Jianping Sun ◽  
Desheng Dash Wu
Keyword(s):  
Contract Design ◽  
Distribution Channels ◽  
Incentive Contract

Heterogeneous suppliers’ contract design in assembly systems with asymmetric information

2020 ◽  
Vol 286 (1) ◽  
pp. 149-163 ◽  
Author(s):  
Yanfei Lan ◽  
Xiaoqiang Cai ◽  
Changjing Shang ◽  
Lianmin Zhang ◽  
Ruiqing Zhao
Keyword(s):  
Asymmetric Information ◽  
Contract Design ◽  
Assembly Systems

scholarly journals The Incentive Model in Supply Chain with Trade Credit and Default Risk

Complexity ◽  
2019 ◽  
Vol 2019 ◽  
pp. 1-11
Author(s):  
Hong Cheng ◽  
Yingsheng Su ◽  
Jinjiang Yan ◽  
Xianyu Wang ◽  
Mingyang Li
Keyword(s):  
Supply Chain ◽  
Asymmetric Information ◽  
Moral Hazard ◽  
Private Information ◽  
Default Risk ◽  
Trade Credit ◽  
Uncertain Demand ◽  
Market Demand ◽  
Incentive Contract ◽  
Risk Neutral

Trade credit is widely used for its advantages. However, trade credit also brings default risk to the manufacturer due to the uncertain demand. And moral hazard may aggravate the default risk. The purpose of this paper is to investigate the role of moral hazard in trade credit and explore incentive contract under uncertain demand and asymmetric information. We consider a two-echelon supply chain consisting of a risk-neutral retailer ordering a single product from a risk-neutral manufacturer. Market demand is stochastic and is influenced by retailer’s sales effort which is his private information. Incentive theory is used to develop the principal-agent model and get the incentive contract from the manufacturer’s perspective. Results show that the retailer will reduce his effort level to get more profit and the manufacturer’s profit will be reduced, in the case of asymmetric information. Facing this result, the manufacturer will reduce the order quantity in incentive contract to lessen his losses. Numerical examples are provided to illustrate all these theoretical results and to draw managerial insights.

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