Multi-period incentive contract design in the agent emergency supplies reservation strategy with asymmetric information

Agent reserve strategy have experienced increased popularity in recent decades. In such a reservation method, the amount of effort exerted by an enterprise has significant influence on the value and supply capacity of emergency materials. When the interests of the government and the enterprise are not aligned, combined with poor information sharing, the members of the enterprise are more likely to suffer from emotional burnout, especially when considering long-term contract periods. Thus, the enterprise usually cannot consciously act in accordance with the government's wishes. We extend the one-period incentive contract model to multi-periods to constrain the enterprise's behavior and stimulate it to exert more effort. We conduct a numerical experiment to illustrate the changes in the two parties' benefits over the contract period using the MATLAB experimental platform. The results show that both parties can benefit, and the incentive power of a multi-period incentive contract is better than that of a one-period contract. Furthermore, we analyze and determine the optimal cooperation period and the optimal joint profit. The practical purpose of using a multi-period incentive contract is steady improvement in emergency supplies' capabilities and a strengthening of the enterprise's effort, which lead to long-term benefits for both the government and the enterprise and valuable suggestions for the government's decision-making.