{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,2,26]],"date-time":"2026-02-26T20:35:57Z","timestamp":1772138157731,"version":"3.50.1"},"reference-count":32,"publisher":"Emerald","issue":"4","license":[{"start":{"date-parts":[[2017,12,15]],"date-time":"2017-12-15T00:00:00Z","timestamp":1513296000000},"content-version":"tdm","delay-in-days":0,"URL":"https:\/\/www.emerald.com\/insight\/site-policies"}],"content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":["K"],"published-print":{"date-parts":[[2018,3,16]]},"abstract":"<jats:sec>\n<jats:title content-type=\"abstract-subheading\">Purpose<\/jats:title>\n<jats:p>The advent of e-commerce has prompted the proliferation of digital platforms for virtual products. This reinforces the importance of the contract design problem between the virtual product supplier (he) and the digital platform retailer (she). The purpose of this paper is to investigate a principal-agent problem in a virtual product supply chain, in which the retailer\u2019s sales-effort investment level to sell the virtual product is unobservable to the supplier, and the market demand is unknown to both parties.<\/jats:p>\n<\/jats:sec>\n<jats:sec>\n<jats:title content-type=\"abstract-subheading\">Design\/methodology\/approach<\/jats:title>\n<jats:p>In this study, the supplier designs two kinds of contracts (wholesale price contract and two-part tariff contract) to maximize his profit, while the retailer determines her sales-effort investment level and the virtual product\u2019s retail price. The results of two different types of contracts are compared to explore in depth the effect of contract choices on the participants\u2019 profits.<\/jats:p>\n<\/jats:sec>\n<jats:sec>\n<jats:title content-type=\"abstract-subheading\">Findings<\/jats:title>\n<jats:p>The authors show that the comparative results of the optimal wholesale prices, retail prices and sales-effort investment levels between these two kinds of contracts all rely on the retailer\u2019s risk-averse degree. Specifically, both the supplier and the whole supply chain prefer the two-part tariff contract rather than the wholesale price contract, the retailer should do opposite when she is low risk-averse, whereas there is no distinction for the retailer\u2019s utilities between these two kinds of contracts when she is more risk-averse.<\/jats:p>\n<\/jats:sec>\n<jats:sec>\n<jats:title content-type=\"abstract-subheading\">Originality\/value<\/jats:title>\n<jats:p>The value of the research rests on the use of principal-agent theory in the contracts of virtual products considering the retailer\u2019s sales-effort and risk-aversion degree. The research will serve as a guide for the virtual products\u2019 supplier and the platform retailer in decision-making processes.<\/jats:p>\n<\/jats:sec>","DOI":"10.1108\/k-05-2017-0177","type":"journal-article","created":{"date-parts":[[2017,12,15]],"date-time":"2017-12-15T09:15:54Z","timestamp":1513329354000},"page":"716-741","source":"Crossref","is-referenced-by-count":12,"title":["Contract design on digital platform for the risk-averse retailer with moral hazard"],"prefix":"10.1108","volume":"47","author":[{"given":"Zhenhong","family":"Li","sequence":"first","affiliation":[]},{"given":"Bo","family":"Li","sequence":"additional","affiliation":[]},{"given":"Yanfei","family":"Lan","sequence":"additional","affiliation":[]}],"member":"140","published-online":{"date-parts":[[2017,12,15]]},"reference":[{"issue":"4","key":"key2021041509155345800_ref001","first-page":"1","article-title":"Strategic and tactical design of competing decentralized supply chain networks with risk-averse participants for markets with uncertain demand","volume":"35","year":"2011","journal-title":"Mathematical Problem in Engineering"},{"key":"key2021041509155345800_ref002","doi-asserted-by":"crossref","first-page":"54","DOI":"10.1016\/j.ijpe.2014.07.021","article-title":"Analysis of protection and pricing strategies for digital products under uncertain demand","volume":"158","year":"2014","journal-title":"International Journal of Production Economics"},{"issue":"3","key":"key2021041509155345800_ref003","doi-asserted-by":"crossref","first-page":"949","DOI":"10.1016\/j.ejor.2015.05.016","article-title":"Consignment contract for mobile apps between a single retailer and competitive developers with different risk attitudes","volume":"246","year":"2015","journal-title":"European Journal of Operational Research"},{"key":"key2021041509155345800_ref004","doi-asserted-by":"crossref","first-page":"31","DOI":"10.1016\/j.ijpe.2015.05.036","article-title":"The effect of risk sensitivity on supply chain of mobile applications under consignment contract with revenue sharing and quality investment","volume":"168","year":"2015","journal-title":"International Journal of Production Economics"},{"issue":"3","key":"key2021041509155345800_ref005","doi-asserted-by":"crossref","first-page":"926","DOI":"10.1016\/j.ejor.2016.11.030","article-title":"Mergers and acquisitions between risk-averse parties","volume":"259","year":"2017","journal-title":"European Journal of Operational Research"},{"issue":"3","key":"key2021041509155345800_ref006","doi-asserted-by":"crossref","first-page":"593","DOI":"10.1016\/j.ejor.2016.03.014","article-title":"Impact of structure, market share and information asymmetry on supply contracts for a single supplier multiple buyer network","volume":"253","year":"2016","journal-title":"European Journal of Operational Research"},{"issue":"2","key":"key2021041509155345800_ref007","doi-asserted-by":"crossref","first-page":"345","DOI":"10.1111\/j.1937-5956.2011.01258.x","article-title":"Contracting and coordination under asymmetric production cost information","volume":"21","year":"2012","journal-title":"Production and Operations Management"},{"issue":"1","key":"key2021041509155345800_ref008","doi-asserted-by":"crossref","first-page":"60","DOI":"10.1287\/mnsc.1040.0217","article-title":"Salesforce incentives, market information, and production\/inventory planning","volume":"51","year":"2005","journal-title":"Management Science"},{"issue":"1","key":"key2021041509155345800_ref009","doi-asserted-by":"crossref","first-page":"43","DOI":"10.1080\/10864415.2016.1204189","article-title":"The impact of manufacturer\u2019s direct sales and cost information asymmetry in a dual-channel supply chain with a risk-averse retailer","volume":"21","year":"2017","journal-title":"International Journal of Electronic Commerce"},{"issue":"1","key":"key2021041509155345800_ref010","doi-asserted-by":"crossref","first-page":"351","DOI":"10.1016\/j.ejor.2013.12.004","article-title":"Profit criteria involving risk in price setting of virtual products","volume":"236","year":"2014","journal-title":"European Journal of Operational Research"},{"issue":"2","key":"key2021041509155345800_ref011","doi-asserted-by":"crossref","first-page":"471","DOI":"10.1016\/j.ejor.2015.05.024","article-title":"Pricing and sales-effort investment under bi-criteria in a supply chain of virtual products involving risk","volume":"246","year":"2015","journal-title":"European Journal of Operational Research"},{"issue":"2","key":"key2021041509155345800_ref012","doi-asserted-by":"crossref","first-page":"489","DOI":"10.1007\/s10479-013-1386-4","article-title":"Supply chain risk analysis with mean-variance models: a technical review","volume":"240","year":"2016","journal-title":"Annals of Operations Research"},{"issue":"2","key":"key2021041509155345800_ref013","doi-asserted-by":"crossref","first-page":"552","DOI":"10.1016\/j.ijpe.2010.10.004","article-title":"Mean-downside-risk and mean-variance newsvendor models: Implications for sustainable fashion retailing","volume":"135","year":"2012","journal-title":"International Journal of Production Economics"},{"issue":"5","key":"key2021041509155345800_ref014","doi-asserted-by":"crossref","first-page":"1169","DOI":"10.1109\/TSMCA.2008.2001057","article-title":"Mean-variance analysis for the newsvendor problem","volume":"38","year":"2008","journal-title":"IEEE Transactions on Systems, Man, and Cybernetics-Part A: Systems and Humans"},{"issue":"4","key":"key2021041509155345800_ref015","doi-asserted-by":"crossref","first-page":"1017","DOI":"10.25300\/MISQ\/2014\/38.4.04","article-title":"An analysis of pricing models in the electronic book market","volume":"38","year":"2014","journal-title":"MIS Quarterly"},{"issue":"1","key":"key2021041509155345800_ref016","doi-asserted-by":"crossref","first-page":"106","DOI":"10.1287\/mnsc.1040.0214","article-title":"A principal-agent model for product specification and production","volume":"51","year":"2005","journal-title":"Management Science"},{"issue":"4","key":"key2021041509155345800_ref017","doi-asserted-by":"crossref","first-page":"338","DOI":"10.1287\/mksc.17.4.338","article-title":"Coordinating channels under price and nonprice competition","volume":"17","year":"1998","journal-title":"Marketing Science"},{"issue":"2","key":"key2021041509155345800_ref018","doi-asserted-by":"crossref","first-page":"168","DOI":"10.1016\/j.omega.2010.06.002","article-title":"Outsourcing vs. in-house production: a comparison of supply chain contracts with effort dependent demand","volume":"39","year":"2011","journal-title":"Omega"},{"issue":"8","key":"key2021041509155345800_ref019","doi-asserted-by":"crossref","first-page":"2341","DOI":"10.1287\/mnsc.2015.2248","article-title":"Supply chain contract design under financial constraints and bankruptcy costs","volume":"62","year":"2016","journal-title":"Management Science"},{"issue":"2","key":"key2021041509155345800_ref020","doi-asserted-by":"crossref","first-page":"291","DOI":"10.1016\/S0377-2217(98)00123-4","article-title":"Manufacturer\u2019s pricing strategy and return policy for a single-period commodity","volume":"116","year":"1999","journal-title":"European Journal of Operational Research"},{"issue":"2","key":"key2021041509155345800_ref021","first-page":"449","article-title":"Supplier encroachment under asymmetric information","volume":"60","year":"2013","journal-title":"Management Science"},{"key":"key2021041509155345800_ref022","article-title":"Groupon and Expedia: a comparison of two modern online trends creating a parallel tax inquiry","volume":"6","year":"2014","journal-title":"The Elon Law Review"},{"key":"key2021041509155345800_ref024","doi-asserted-by":"crossref","first-page":"19","DOI":"10.1016\/j.omega.2016.03.004","article-title":"Enhancing corporate social responsibility: contract design under information asymmetry","volume":"67","year":"2017","journal-title":"Omega"},{"issue":"2","key":"key2021041509155345800_ref023","doi-asserted-by":"crossref","first-page":"745","DOI":"10.1016\/j.ijpe.2013.09.004","article-title":"Contract design for two-stage supply chain coordination: integrating manufacturer-quality and retailer-marketing efforts","volume":"146","year":"2013","journal-title":"International Journal of Production Economics"},{"issue":"2","key":"key2021041509155345800_ref025","doi-asserted-by":"crossref","first-page":"197","DOI":"10.1111\/j.1937-5956.2009.01014.x","article-title":"Motivating retail marketing effort: optimal contract design","volume":"18","year":"2009","journal-title":"Production and Operations Management"},{"issue":"2","key":"key2021041509155345800_ref026","doi-asserted-by":"crossref","first-page":"199","DOI":"10.1509\/jmr.13.0506","article-title":"Can sales uncertainty increase firm profits?","volume":"53","year":"2016","journal-title":"Journal of Marketing Research"},{"issue":"4","key":"key2021041509155345800_ref027","doi-asserted-by":"crossref","first-page":"372","DOI":"10.1287\/msom.2.4.372.12342","article-title":"Channel dynamics under price and service competition","volume":"2","year":"2000","journal-title":"Manufacturing & Service Operations Management"},{"key":"key2021041509155345800_ref028","volume-title":"Digital Music: Economic Perspectives, Handbook of the Digital Creative Economy","year":"2013"},{"issue":"1","key":"key2021041509155345800_ref029","doi-asserted-by":"crossref","first-page":"134","DOI":"10.1111\/poms.12218","article-title":"Impact of contracts and competition upstream innovation in a supply chain","volume":"24","year":"2015","journal-title":"Production and Operations Management"},{"issue":"11","key":"key2021041509155345800_ref030","doi-asserted-by":"crossref","first-page":"1919","DOI":"10.1111\/poms.12202","article-title":"Committed versus contingent pricing under competition","volume":"23","year":"2014","journal-title":"Production and Operations Management"},{"issue":"3","key":"key2021041509155345800_ref031","doi-asserted-by":"crossref","first-page":"724","DOI":"10.1016\/j.omega.2008.02.005","article-title":"Mean-variance analysis of the newsvendor model with stock out cost","volume":"37","year":"2009","journal-title":"Omega"},{"key":"key2021041509155345800_ref032","doi-asserted-by":"crossref","first-page":"171","DOI":"10.1016\/j.ijpe.2013.09.012","article-title":"Coordinating a dual-channel supply chain with risk-averse under a two-way revenue sharing contract","volume":"147","year":"2014","journal-title":"International Journal of Production Economics"}],"container-title":["Kybernetes"],"original-title":[],"language":"en","link":[{"URL":"https:\/\/www.emerald.com\/insight\/content\/doi\/10.1108\/K-05-2017-0177\/full\/xml","content-type":"application\/xml","content-version":"vor","intended-application":"text-mining"},{"URL":"https:\/\/www.emerald.com\/insight\/content\/doi\/10.1108\/K-05-2017-0177\/full\/html","content-type":"unspecified","content-version":"vor","intended-application":"similarity-checking"}],"deposited":{"date-parts":[[2025,7,24]],"date-time":"2025-07-24T21:48:10Z","timestamp":1753393690000},"score":1,"resource":{"primary":{"URL":"http:\/\/www.emerald.com\/k\/article\/47\/4\/716-741\/271155"}},"subtitle":["Wholesale price vs two-part tariff"],"short-title":[],"issued":{"date-parts":[[2017,12,15]]},"references-count":32,"journal-issue":{"issue":"4","published-online":{"date-parts":[[2017,12,15]]},"published-print":{"date-parts":[[2018,3,16]]}},"alternative-id":["10.1108\/K-05-2017-0177"],"URL":"https:\/\/doi.org\/10.1108\/k-05-2017-0177","relation":{},"ISSN":["0368-492X"],"issn-type":[{"value":"0368-492X","type":"print"}],"subject":[],"published":{"date-parts":[[2017,12,15]]}}}