The Incentive Mechanism for the Reverse Supply Chain Based on Hidden Information of Reverse Costs

As a variable of hidden information of reverse costs,reverse operational capacity can be divided into strength and weakness;reverse cost is lower for strength,while it is higher for weakness.The linear pooling contract and the linear screening contract are studied on condition that asymmetric information is discrete and continuous respectively;the linear screening contract can screen strength and weakness effectively.The contract was modeled with the usage of principle-agent theory and the theory of screening game.The recyclers' preference of the two kinds of contracts is relative with their expected profit.And the effect of relevant factors on the manufacturer's expected profit was illustrated with a numerical simulation.