On Incentive and Coordination Mechanism of Service Outsourcing Based on Principal-Agent Theory and Blockchain Technology

Abstract

 To address the issue of information asymmetry between the two parties and moral hazard among service providers in the process of service outsourcing, this paper first builds the Stackelberg game model based on the principal-agent framework, examines the dynamic game situation before the contract being signed, and develops four information models. Second, the analysis reveals a Pareto improvement in the game's Nash equilibrium when comparing the four models from the standpoint of the supply chain. In the complete information scenario, the service level of the service provider, the customer company's incentive effectiveness, and the supply chain system's ultimate profit are all maximized. Once more, a coordinating mechanism for disposable profit is built in this study. The paper then suggests a blockchain-based architecture for the service outsourcing process supervision and a distributed incentive mechanism under the coordination mechanism in response to the inadequacy of the principal-agent theory to address the information asymmetry problem and the moral hazard problem. The experiment's end findings demonstrate that both parties can benefit from the coordination mechanism and that the application of blockchain technology can resolve these issues and effectively encourage service providers.