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Design of live broadcast service outsourcing contract considering risk aversion and financial constraints

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Listed:
  • Na Zhou
  • Ke Jia
  • Han Song

Abstract

Aiming at the problem of double information asymmetry in live broadcast service outsourcing, firstly, using the principal‐agent theory, we design an incentive contract based on the live broadcast time and revenue sharing payment. Then, we further consider the risk aversion of the live broadcast company, and study the design of the live broadcast service outsourcing contract when the live broadcast company considers the risk of uncertain sales and has financial constraints. The optimal contract and its influencing factors under double information asymmetry are analyzed. Finally, the relevant conclusions are verified by numerical examples, and management implications are summarized.

Suggested Citation

  • Na Zhou & Ke Jia & Han Song, 2023. "Design of live broadcast service outsourcing contract considering risk aversion and financial constraints," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(2), pages 848-857, March.
    • Handle: RePEc:wly:mgtdec:v:44:y:2023:i:2:p:848-857
    DOI: 10.1002/mde.3716
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    References listed on IDEAS

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    1. Wongkitrungrueng, Apiradee & Assarut, Nuttapol, 2020. "The role of live streaming in building consumer trust and engagement with social commerce sellers," Journal of Business Research, Elsevier, vol. 117(C), pages 543-556.
    2. Ehsan Bolandifar & Tianjun Feng & Fuqiang Zhang, 2018. "Simple Contracts to Assure Supply Under Noncontractible Capacity and Asymmetric Cost Information," Manufacturing & Service Operations Management, INFORMS, vol. 20(2), pages 217-231, May.
    3. Rodrigo Nobre Fernandez & Helton Saulo & André Carraro & Fabricio Tourrucôo & Ronald Hillbrecht, 2018. "Public-Private Partnership Contractual Design: A Computational Model of the Moral Hazard with Lotteries," Public Organization Review, Springer, vol. 18(1), pages 39-51, March.
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    Cited by:

    1. Jianyue Liu & Zhiqiang Ma & Binxin Zhu, 2024. "Optimal innovation incentive strategies within the health crowdsourcing platform," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 45(6), pages 4305-4319, September.
    2. Wenqian Zhang & Haiyan Wang, 2023. "Optimal contract design for live streaming platforms under dual asymmetric information considering corporate social responsibility," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(6), pages 3537-3555, September.

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