Incentive contracts of knowledge investment for cooperative innovation in project-based supply chain with double moral hazard

Chen, Yinzhong; Chen, Wei

doi:10.1007/s00500-019-03894-8

Cited by 17 publications

(11 citation statements)

References 13 publications

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“…e above examples and many previous research studies [1][2][3] show that deep collaboration and knowledge sharing among supply chain members may help each enterprise achieve higher return rates. In order to meet consumer's demand for product performance and improve market competitiveness, the manufacturer usually invests in R&D to improve innovation level of his product.…”

Section: Introductionmentioning

confidence: 71%

“…us, the researchers investigate different types of contract mechanisms to better understand the supply chain coordination. For example, Chen and Chen [1] found that the formal contract cannot motivate supply chain member's knowledge investment effectively. Under all discount rates, the degree of knowledge investment and participant income of cooperative innovation under relational contract are no less than that under formal contract.…”

Section: Contract Design and Coordination Of A Supply Chainmentioning

confidence: 99%

“…where q(t) can be calculated by inserting the optimality into equation (1). We thus obtain the optimal path of the innovation level as follows:…”

Section: Benchmark Modelmentioning

confidence: 99%

“…Inspired by some previous literatures, e.g., [1,3,[5][6][7], this paper investigates the cooperative innovation mechanisms of a supply chain which is composed of one manufacturer and one retailer under three transfer payment contracts: the wholesale price contract, the incentive contract based on the effort in consumer's knowledge collection, and the incentive contract based on the target effort in consumer's knowledge collection. e comparative analyses of the incentive contracts are derived.…”

Section: Introductionmentioning

confidence: 99%

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Collaborative Innovation with Dynamic Incentive Contracts in a Supply Chain

Hao

Chen

Hong

2020

Mathematical Problems in Engineering

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The collection and sharing of consumers’ knowledge by retailers can help manufacturers improve the innovation level of products, thereby improving the performance of supply chain. However, due to the cost of collecting consumers’ knowledge, the wholesale price contract can no longer coordinate supply chain members effectively. It is necessary to study the problem how the retailers are encouraged to make more efforts for the cooperative innovation with manufacturers. This paper introduces two dynamic incentive contracts for improving collaborative innovation level in a two-player supply chain, and the impacts of these contracts on supply chain’s performance are investigated, by using a Stackelberg differential game model. The manufacturer, as a Stackelberg leader, determines the R&D investment while the retailer is responsible for the retail price and the efforts in collection of the consumer’s information (or preference) to the products. The model incorporates a wholesale price contract and two incentive contracts to better understand how the manufacturer can facilitate the retailer’s efforts in the collection of consumer’s information and increase the profits of the members of supply chain. Our results suggest that the optimal profit of the supply chain, the retailer’s efforts in the collection of consumer’s knowledge, the retail price, and the innovation level under the reward incentive contract are higher than their counterparts in other contracts. In particular, the retailer’s optimal effort under the reward incentive contract is even higher than the one in the centralized decision scenario. However, if the manufacturer commits an effort target to the retailer, it shows that the retailer’s optimal effort is independent of the target. The manufacturer’s optimal R&D investments are constants in the three contracts under the dynamic setting. Furthermore, numerical simulations show that the effort target has little impact on profits of the supply chain although it affects the decision making of supply chain members to some extent, whereas the retailer’s marginal reward offered by the manufacturer influences the innovation level of product and the supply chain’s profit significantly.

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Section: Introductionmentioning

confidence: 71%

Section: Contract Design and Coordination Of A Supply Chainmentioning

confidence: 99%

“…where q(t) can be calculated by inserting the optimality into equation (1). We thus obtain the optimal path of the innovation level as follows:…”

Section: Benchmark Modelmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Collaborative Innovation with Dynamic Incentive Contracts in a Supply Chain

Hao

Chen

Hong

2020

Mathematical Problems in Engineering

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“…The project-based supply chain mainly focuses on the project innovation, it's a cross-organizational structure mode with specific functions, and it is formed by upstream and downstream enterprises in the supply chain with heterogeneous and complementary knowledge resources in order to achieve a common goal [1,2]. Compared with the traditional supply chain, the project-based supply chain emphasizes more on the collaborative innovation among upstream and downstream enterprises based on projects, so it perfectly fits the innovation needs of project-based enterprises [3,4]. Under the strategic background of national innovationdriven development, the collaborative innovation of projectbased supply chain has gradually become the focus of attention in the theoretical and practical research fields.…”

Section: Introductionmentioning

confidence: 99%

Product Collaborative Innovation of Project-based Supply Chain under the Influence of Knowledge Input

Chen¹,

Hao²,

Jin³

2019

JESA

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In a project-based supply chain, the knowledge input of member enterprises directly bears on the success of the collaborative innovation. Considering the effect of enterprise knowledge input on product collaborative innovation, this paper applies the differential game theory to coordinate the product collaborative innovation in a three-stage supply chain, consisting of a manufacturer, a supplier and a seller. The equilibrium outcomes of centralized decisionmaking mode and two decentralized decision-making modes, namely, the Stackelberg masterslave game and the Nash non-cooperative game, were subjected to a comparative analysis. The results show that, under the centralized decision-making mode, the knowledge input and collaborative innovation of enterprises were optimized, leading to the maximal overall revenue of the supply chain. Under the two decentralized decision-making modes, the manufacturer had the same knowledge input; however, the supplier and the seller both had higher knowledge input amount, enterprise revenue and collaborative innovation level under the Stackelberg master-slave game than under the Nash non-cooperative game; the increase ratios of knowledge input of the supplier and the seller are equal to the proportions of their respective knowledge input costs that are shared.

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Quality incentive contract design in government procurement for innovation

Wang

2022

Manage Decis Econ

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Recently, as supply‐side innovation incentive policies do not work well in China, demand‐side instruments, like the government procurement for innovation, are emphasized. However, as the enterprise may be better informed than the government about its initial technology level and effort, the government faces the dual information asymmetry of adverse selection and moral hazard in the process of procurement. Thus, in this paper, series of quality incentive contract models are proposed to illustrate how the government can identify the initial technology type of the enterprise and motivate it to exert effort to improve the innovation quality.

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Incentive contracts of knowledge investment for cooperative innovation in project-based supply chain with double moral hazard

Cited by 17 publications

References 13 publications

Collaborative Innovation with Dynamic Incentive Contracts in a Supply Chain

Collaborative Innovation with Dynamic Incentive Contracts in a Supply Chain

Product Collaborative Innovation of Project-based Supply Chain under the Influence of Knowledge Input

Quality incentive contract design in government procurement for innovation

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