Price-adjusting contract in supply chain with asymmetric information

Members have asymmetrical information in supply chains. Stable and long-term trade companionship is difficult to set up and maintain without efficient coordination mechanism. Once the supply-demand relation set up, because the demander may misdirect the supplier to grab more profit by information concealing (or information advantage), the supplier will suffer under most situations. This paper designed for the supplier a price-adjusting strategy, which efficiently prevents the demander\´s speculating behavior and alleviates the "bullwhip effect" in the supply chain.