Game-Theoretic Analysis for a Supply Chain With Distributional and Peer-Induced Fairness Concerned Retailers

Yucheng SHI, Jia'ang ZHU

Abstract


In this paper, we consider a supply chain system with one supplier and two homogeneous retailers to investigate the influence of distributional and peer-induced fairness concerns on supply chain. The Nash bargaining solution is used as distributional fairness reference and the first retailer’s monetary payoff is used as the peer-induced fairness reference. We first analyze the decision-making process of the fairness concerned retailers under a given wholesale price and make a comparison with the fairness-neutral counterparts, then we derive the supplier’s optimal wholesale price and the retailers’ corresponding optimal order quantity in equilibrium. The results show that the second retailer orders less product and receives a higher wholesale price than the first retailer. The peer-induced fairness concerned retailer is in a worse position than the distributional fairness concerned retailer.

Keywords


Supply chain management; Game theory; Distributional fairness; Peer-induced fairness

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References


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DOI: http://dx.doi.org/10.3968/4400

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