Reputation Mechanism in a Newsvendor-Type Supply Chain with Pure Moral Hazard

The moral hazard caused by asymmetry information is common in supply chains, and the effect of controlling it is often weakened by the shortsightedness of decision-makers. We extend the single-period moral-hazard issue into a multi-period one in a newsvendor-type supply chain, explore the evolution mechanism of the manufacturer's reputation and its value for mitigating the moral hazard. We find the necessary and sufficient condition for the implicit coordination effect of reputation. Furthermore, we develop a revised trigger strategy for the case beyond the condition, and find the critical condition to eliminate the moral hazard and optimally coordinate the supply chain.