A dynamic reputation incentive model in construction supply chain

Integration and coordination, which were essential thoughts of supply chain management theory originated in the manufacturing industry, were inducted into the construction industry and construction project management. A kind of long-term incentive mechanism based on implicit reputation factor was presented to improve construction market environment, to coordinate organization relationships and to prevent the deputypsilas moral hazard. The game theory and principal agent theory were applied to analyze effect of reputation incentive mechanism in the construction industry. A two-stage dynamic incentive contract model integrating implicit reputation incentive mechanism with explicit revenue incentive mechanism was established. Through analyzing influencing factors of reputation incentive effect and comparative analysis with explicit incentive mechanism without considering implicit reputation factor, conditions of effective equilibrium and Pareto improvement of the two partiespsila revenue for the reputation incentive mechanism were obtained. A numerical study also testified validity of the model.