A study on Principal-agent Relationship for Third-party Reverse Logistics Based on EPR

In order to implement extended producer responsibility (EPR) and improve the efficiency of recycling as well as benefits, producers (demand-side of logistics) select the third-party to recycle and process waste electrical and electronic equipment (WEEE). The relationship between production enterprises and third-party reverse logistics providers is a principal-agent. Under the constraint that the third-party reverse logistics providers' environmental protection ability and effort level are asymmetric information, the principal-agent models between the production enterprises and third-party reverse logistics providers are established, and then the models are solved as well as influencing factors are analyzed. It is found that the more effort the third party reverse logistics providers (TPRLP) make to recycle waste, the greater the strength factor of incentive pay is and the bigger the cost coefficient of TPRLP is, the smaller the strength factor of incentive pay is.