Application of Independent Finance Certification Agency in the Decision Process of Vendor Selection

Chunxiao Luan
2015 International Journal of u- and e- Service, Science and Technology  
This paper introduces independent finance certification agency to supervise the vendor selection process under the circumstance of the dynamic and incomplete information market. Using the signaling theory under unsymmetric information of game theory, a multidime nsion signaling model of the strategic choice is established. The game model is set up and the equilibrium calculated out following the description of the key elements of the buyer and vendor in above market. Upon separating
more » ... arating equilibrium, the provider dispatches the signal stands for his actual category to maintain the performance of the market. Upon pool equilibrium, the inefficient provider rather than efficient one occupies the core position which results in loss of the latter. Case result shows that the buyer can adopt the signals from the Independent finance certification agency as a significant element when making decision. As a result the introduction of independent finance certification agency can effectively and efficiently supervise the vendor selection process in incomplete information market. Keywords: We would like to encourage you to list your keywords in this section. Copyright ⓒ 2015 SERSC 367 discrepant with that existing literature objective to establish a kind of supplier decision strategy under which people will attach considerable importance to the independent finance certification agency. In the paper, the signaling game model was applied to interpret the effect of the existence of independent finance certification agencies in the market with incomplete information which is described as equilibrium in the model.
doi:10.14257/ijunesst.2015.8.5.34 fatcat:abtv7z7ktfco3bc3q4l37yamzi