Optimal Service Commission Contract Design of OTA to Create O2O Model by Cooperation with TTA under Asymmetric Information

Table 1

Notation and definitions.

Notation	Definitions
sO	Sale ability of OTA
eO	Sale effort of OTA
C (eO)	Sale cost of OTA
	Sale cost coefficient of OTA
sT	Serviceability of TTA
eT	Service effort of TTA
	Service cost coefficient of TTA
C (eT)	Unit cost of service effort of TTA
Q	The demand for O2O model
	Market scale
	Market random factors
T (q)	Service commission that OTA pays for TTA
A	Fixed payment
B	Service commission coefficient or the rate of revenue sharing
Π (q), ΠO, ΠT	The revenue of O2O model, OTA, and TTA, respectively
EΠO, EΠT	The expected revenue of OTA and TTA, respectively
UT (EΠT)	The utility function of TTA
R	TTA’s risk aversion coefficient
I	The state of TTA’s serviceability, i = H, L
sTi	TTA’s serviceability, i = H, L
	The probability that the OTA believes that the TTA’s serviceability is at a high state

Note that the superscript denotes the optimal solutions.