Research On Incentive Mechanism Of Book Supply Chain Based On Principal-Agent Theory

With the gradual implement of opening-door policy on the wholesale and retail of books in 2004,the continuous emergence of private booksellers and the increasing popularity of electronic reading media,the competition of domestic traditional book market is becoming more and more intense.On account of the severe market competition situation,the book industry also has implemented the supply chain management model.Because the member enterprises of supply chain have a partnership,to achieve the overall efficiency of the supply chain must be based on the mutual trust and coordination as well as the synchronization and coordination of enterprises.However,the enterprises of the supply chain are independent economies with different responsibilities and pursuit of interest,leading to inconsistent between the target of member enterprises and the overall goal of the supply chain,thus resulting in the inefficiency of the entire system,and the lack of inspective and incentive mechanism is the important reason for the cooperation instability between enterprises of supply chain.Therefore,it is the key to ensure the efficient operation of the book supply chain by setting up an effective incentive mechanism to deal with the principal-agent problem between the book supplier who plays as the principal and the book seller as the agent.Based on the existing literature on supply chain incentive mechanism,this paper has analyzed the behavior of book sellers as agents by game theory,and established the explicit incentive mechanism models under circumstances of information symmetry and information asymmetry,and the implicit incentive mechanism model for multi-stage dynamic games is established by introducing reputation model and ratcheting effect.Based on the principal-agent theory,this paper has mainly studied the incentive mechanism of the book supply chain as follows:Firstly,based on the principal-agent theory,this paper has analyzed the principal-agent relationship and its problems among the member enterprises of the book supply chain,and established explicit incentive mechanism models which the book supplier as the principal and the downstream seller as the agent,and solved the incentive models of information symmetry and information asymmetry,as well as carried out the data simulation analysis.Secondly,given the non-disposable relationship between the book supplier and its downstream sellers,that is to say a multi-stage dynamic game is exist,this article has studied the incentive problem in the book supply chain by using the implicit incentive mechanism of the principal-agent theory,and established the reputation model and ratcheting effect model,proved the effectiveness of the implicit incentive mechanism.