Abstract:

With the increasing shortage of resources and environmental pollution， most manufacturers have started to recycle used products in order to reduce production costs and increase capacity efficiency. However， the manufacturer and the recycler usually act as different stakeholders in the recycling process， and the recyclers’ private information about their capacity endowment and unobservable effort behaviors affects the allocation efficiency of reverse supply chain. with the development of today's network economy and information technology， the recycling channels have been broadened. The manufacturer often outsources recycling to multiple recyclers， while there is also extensive competition or cooperation relationship between the recyclers. In this context， the following three questions are studied：（1） How can the manufacturer design effective incentive mechanism to screen the true information about the recyclers’ capacity and motivate effort behavior？ （2） What are the characteristics of the manufacturer's optimal incentive contract under the different recovery mode？ （3） How do the manufacturer’s recovery mode decisions depend on factors such as the intensity of competition or cooperation and the recyclers' capacity endowment？ In this paper， a two-channel reverse supply chain consisting of one manufacturer （the principal） and two recyclers （two agents） is considered， and the incentive model which can overcome adverse selection and moral hazard simultaneously under different recovery mode are constructed. In the model， based on the revelation principle， a menu of blanket contracts which can identify the true types of the recyclers and drive the optimal effort is provided. The main work includes three parts.Firstly， the feasible allocation sets composed of recovery performance-payment and the incentive compatibility constraints motivating the recyclers to display true information and paying the best effort are constructed. Secondly， the optimal contract structure under symmetric and asymmetric information about the recyclers’ capacity is determined， and the optimal expected utility levels of the manufacturer and the recyclers under different recovery mode are obtained. Thirdly， the characteristics of the optimal incentive contracts including the performance sharing ratio， the recyclers’effort levels and the information rents are analyzed， and the boundary conditions for the selection of recovery mode are identified. The main results are as follows： （1） The recovery performance sharing ratio increases with the cooperation intensity coefficient， and first increases and then decreases as the competition intensity coefficient increases under certain conditions. （2） The recyclers’ effort levels decrease with the effort cost coefficient， absolute risk aversion coefficient and market uncertainty， and increase with the competition or cooperation intensity coefficient and the effort output coefficient. （3） Compared with the case of symmetric capacity information， the recovery performance sharing ratio and effort levels of the recyclers （except the highest capable one） are distorted downward under the two types of information asymmetry， and the recyclers （except the lowest capable one） obtain additional information rents. （4） With the two types of asymmetric information， under certain conditions， the manufacturer would prefer to choose more competent recycler to establish cooperative recycling channel since it is more conducive to ensuring recycling efficiency and economic benefits. The results of this paper provide theory and methodology for the mechanism design with competitive and cooperative relationships between the recycling channels under asymmetric information.

Key words: reverse supply chain, information asymmetry, mechanism design, adverse selection, moral hazard