Skip to main content
SpringerLink
Log in

Agency models based on different measures with comparison

  • Focus
  • Published:
Soft Computing Aims and scope Submit manuscript

Abstract

Optimal contract regulates the expected activities of both principals and agents, and influences how the gains from the cooperation are shared between the two participators. Thus, it is necessary and wise for principals to seek for the optimal contracts during the period of negotiations. To determine the optimal contracts, there are several kinds of agency models based on different measures, such as probability measure, capacity measure, credibility measure and uncertainty measure. This paper primarily presents a comparative review of random agency model, fuzzy agency model and uncertain agency model. This comparative review is aimed at not only summarizing the structure and feature of each agency model but also guiding on how to identify the most suitable agency model for each specific principal agent problem. Motivated by this idea, these three classes of agency models are respectively investigated about their structure, feature and application, and then an empirical comparison among these models is basically carried out from several aspects, such as information diversity, decision rule and calculation. As a significant contribution, the comparative result in this paper provides the guidance for the principals on how to identify the most suitable agency model for each special principal agent problem in a certain setting.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Similar content being viewed by others

References

  • Berle A, Means C (1932) The modern corporation and private property. Macmillan, New York

    Google Scholar 

  • Chao R, Lichtendahl J, Grushka-Cockayne Y (2014) Incentives in a stage-gate process. Prod Oper Manag 23:1286–1298

    Google Scholar 

  • Chaturvedi A, Martnez-de-Albniz V (2011) Optimal procurement design in the presence of supply risk. Manuf Serv Oper Manag 13:227–243

    Google Scholar 

  • Chen Y, Deng M, Huang K (2014) Hierarchical screening for capacity allocation in supply chain: the role of distributors. Prod Oper Manag 23:405–419

    Google Scholar 

  • Cui L, Zhao R, Tang W (2007) Principal-agent problem in a fuzzy environment. IEEE Trans Fuzzy Syst 15:1230–1237

    Google Scholar 

  • Dubois D, Prade H (1988) Possibility theory: an approach to computerized processing of uncertainty. Plenum Press, New York

    MATH  Google Scholar 

  • Ellsberg D (1961) Risk, ambiguity, and the savage axioms. Q J Econ 75:643–669

    MathSciNet  MATH  Google Scholar 

  • Feng J, Lan Y, Zhao R (2014) Regulating a firm under adverse selection and moral hazard in uncertain environment. Abstr Appl Anal Article ID: 419207

  • Gao J, Teng J, Hou L, Liu X (2017) Pricing strategy of closed-loop supply chain considering competition under uncertain demand. J Syst Eng 32(1):78–88 (in Chinese)

    MATH  Google Scholar 

  • Gilbert S, Weng Z (1998) Incentive effects favor nonconsolidating queues in a service system: the principal-agent perspective. Manag Sci 44:1662–1669

    MATH  Google Scholar 

  • Guesnerie R, Laffont J (1984) A complete solution to a classical of principal-agent problems with an application to the control on a self-managed firm. J Public Econ 25:329–369

    Google Scholar 

  • Holmstrom B (1979) Moral hazard and observability. Bell J Econ 10:74–91

    Google Scholar 

  • Hu M, Guo B, Liu H (2015) Fuzzy principal-agent model for optimal supplier switching with asymmetric information. Int J Mach Learn Cybern 6:7–15

    Google Scholar 

  • Jain N, Hasija S, Popescu D (2013) Optimal contracts for outsourcing of repair and restoration services. Oper Res 61:1295–1311

    MathSciNet  MATH  Google Scholar 

  • Jensen M, Meckling W (1976) Theory of the firm: managerial behavior, agency costs and ownership structure. J Financ Econ 3:305–360

    Google Scholar 

  • Lan Y, Du H (2013) A warranty contract model with uncertain demands. Information-Tokyo 16:1037–1045

    Google Scholar 

  • Lan Y, Zhao R, Tang W (2011) A bilevel fuzzy principal-agent model for optimal nonlinear taxation probelms. Fuzzy Optim Decis Mak 10:211–232

    MathSciNet  MATH  Google Scholar 

  • Lan Y, Zhao R, Tang W (2013) A fuzzy supply chain contract problem with pricing and warranty. J Intell Fuzzy Syst 26:1527–1538

    MathSciNet  MATH  Google Scholar 

  • Liu B (2007) Uncertainty theory, 2nd edn. Springer, Berlin

    MATH  Google Scholar 

  • Liu B (2009a) Some research problems in uncertainty theory. J Uncertain Syst 3:3–10

    Google Scholar 

  • Liu B (2009b) Theory and practice of uncertain programming, 2nd edn. Springer, Berlin

    MATH  Google Scholar 

  • Liu B (2010) Uncertainty theory: a branch of mathematics for modeling human uncertainty. Springer, Berlin

    Google Scholar 

  • Liu B (2015) Uncertainty theory, 4th edn. Springer, Berlin

    MATH  Google Scholar 

  • Liu Y, Ha M (2010) Expected value of function of uncertain variables. J Uncertain Syst 4:181–186

    Google Scholar 

  • Liu B, Liu Y (2002) Expected value of fuzzy variable and fuzzy expected value models. IEEE Trans Fuzzy Syst 10:445–450

    Google Scholar 

  • Ma J, Zhang G, Lu J (2012) A method for multiple periodic factor prediction problems using complex fuzzy sets. IEEE Trans Fuzzy Syst 20(1):32–45

    Google Scholar 

  • Mirrlees J (1974) Notes on welfare economics, information and uncertainty. North-Holland, Amsterdam

    MATH  Google Scholar 

  • Mirrlees J (1976) The optimal structure of authority and incentives within an organization. Bell J Econ 7:105–131

    MathSciNet  Google Scholar 

  • Mu R, Lan Y, Tang W (2013) An uncertain contract model for rural migrant worker’s employment problems. Fuzzy Optim Decis Mak 12:29–39

    MathSciNet  MATH  Google Scholar 

  • Nahmias S (1978) Fuzzy variables. Fuzzy Set Syst 1:97–110

    MathSciNet  MATH  Google Scholar 

  • Patrick B, Mathias D (2005) Contract theory. The Massachusetts Institute of Technology Press, London

    Google Scholar 

  • Ross S (1973) The economic theory of agency: the principal’s problem. Am Econ Rev 63:134–139

    Google Scholar 

  • Song Q, Shi K (2014) A fuzzy waiting time contract for patient’s public health care. J Intell Fuzzy Syst 27:1001–1009

    MathSciNet  MATH  Google Scholar 

  • Spence M, Zechhauser R (1971) Insurance, information and individual action. Am Econ Rev 61:380–387

    Google Scholar 

  • Van Long N, Sorger G (2010) A dynamic principal-agent problem as a feedback Stackelberg differential game. Cent Eur J Oper Res 18:491–509

    MathSciNet  MATH  Google Scholar 

  • Wang J, Zhao R, Tang W (2008) Supply chain coordination by revenue-sharing contract with fuzzy demand. J Intell Fuzzy Syst 19:409–420

    MATH  Google Scholar 

  • Wang J, Zhao R, Tang W (2009) Supply chain coordination by single-period and long-term contracts with fuzzy market demand. Tsinghua Sci Technol 14:218–224

    MathSciNet  MATH  Google Scholar 

  • Wang G, Tang W, Zhao R (2013) An uncertain price discrimination model in labor market. Soft Comput 17:579–585

    MATH  Google Scholar 

  • Wang J, Yang K, Zhao R (2014a) The impact of decision criteria on deadline-based incentive contracts in project management. J Intell Manuf 28(3):643–655

    Google Scholar 

  • Wang X, Lan Y, Wang J (2014b) An uncertain wage contract model with adverse selection and moral hazard. J Appl Math Article ID: 282867

  • Wilson R (1969) The structure of incentive for decentralization under uncertainty. La Decision, Paris

    MATH  Google Scholar 

  • Wu X, Zhao R, Tang W (2014a) Uncertain agency models with multi-dimensional incomplete information based on confidence level. Fuzzy Optim Decis Mak 13:231–258

    MathSciNet  MATH  Google Scholar 

  • Wu X, Zhao R, Tang W (2014b) Optimal contracts for the agency problem with multiple uncertain information. Knowl Based Syst 59:161–172

    Google Scholar 

  • Wu X, Lan Y, Liu H (2014c) Optimal revenue-sharing contract based on forecasting effort for uncertain agency problem. Int J Mach Learn Cybern 5(6):971–979

    Google Scholar 

  • Wu X, Zhao R, Tang W (2015) Principal-agent problems based on credibility measure. IEEE Trans Fuzzy Syst 23(4):909–922

    Google Scholar 

  • Xiao W, Xu Y (2012) The impact of royalty contract revision in a multistage strategic R&D alliance. Manag Sci 58:2251–271

    Google Scholar 

  • Xu H, Peng W (2017) The optimal price decision and incentive contract design under asymmetric information. J Syst Eng 32(4):474–485 (in Chinese)

    MATH  Google Scholar 

  • Yan Y, Zhao R, Lan Y (2017) Asymmetric retailers with different moving sequences: group buying vs. individual purchasing. Eur J Oper Res 261(3):903–917

    MathSciNet  MATH  Google Scholar 

  • Yan Y, Zhao R, Xing T (2019) Strategic introduction of the marketplace channel under dual upstream disadvantages in sales efficiency and demand information. Eur J Oper Res 273(3):968–982

    MathSciNet  Google Scholar 

  • Yang K, Zhao R, Lan Y (2014) The impact of risk attitude in new product development under dual information asymmetry. Comput Ind Eng 76:122–137

    Google Scholar 

  • Yang K, Lan Y, Zhao R (2017) Monitoring mechanisms in new product development with risk-averse project manager. J Intell Manuf 28(3):667–681

    Google Scholar 

  • Zadeh L (1965) Fuzzy sets. Inf Control 8:338–353

    MATH  Google Scholar 

  • Zadeh L (1978) Fuzzy sets as a basis for a theory of possibility. Fuzzy Set Syst 1:3–28

    MathSciNet  MATH  Google Scholar 

  • Zhang G, Dillon T, Cai K, Ma J, Lu J (2009) Operation properties and \(\delta \)-equalities of complex fuzzy sets. Int J Approx Reason 50(8):1227–1249

    MathSciNet  MATH  Google Scholar 

  • Zhao J, Tang W, Wei J (2012) Pricing decision for substitutable products with retail competition in a fuzzy environment. Int J Prod Econ 135(1):144–153

    Google Scholar 

  • Zhou C, Zhao R, Tang W (2008) Two-echelon supply chain games in a fuzzy environment. Comput Ind Eng 55(2):390–405

    Google Scholar 

Download references

Acknowledgements

The work of Dr. Wu was supported by the National Natural Science Foundation of China under Grant No. 71601141, the State Scholarship Fund from China Scholarship Council and the Program for Innovative Research Team in University of Tianjin (No. TD13-5038).

Author information

Authors and Affiliations

  1. School of Economics and Management, Tianjin Polytechnic University, Tianjin, 300387, China

    Xiaoli Wu

  2. College of Economics and Management, Tianjin University of Science and Technology, Tianjin, 300222, China

    Guoli Wang

  3. School of Mathematical Science, Tianjin Polytechnic University, Tianjin, 300387, China

    Xiulan Wang

  4. College of Management and Economics, Tianjin University, Tianjin, 300072, China

    Xinning Yu

Authors
  1. Xiaoli Wu
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Guoli Wang
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Xiulan Wang
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Xinning Yu
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Guoli Wang.

Ethics declarations

Conflict of interest

The authors declare that they have no conflict of interest.

Ethical approval

This article does not contain any studies with human or animal participants performed by any of the authors.

Informed consent

Informed consent is obtained from all individual participants included in the study.

Additional information

Communicated by X. Li.

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Wu, X., Wang, G., Wang, X. et al. Agency models based on different measures with comparison. Soft Comput 24, 6363–6373 (2020). https://doi.org/10.1007/s00500-019-04044-w

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s00500-019-04044-w

Keywords

Search

Navigation