Affiliation:
1. School of Transportation and Logistics, Southwest Jiaotong University, Chengdu 610031, China
2. National United Engineering Laboratory of Integrated and Intelligent Transportation, Chengdu 610031, China
Abstract
Unbalanced power structures can lead to an inequitable distribution of the supply chain’s profits, creating unstable supply chain relationships and serious social problems. This paper builds a two-tier newsvendor model composed of a single supplier and a single retailer and introduces Nash bargaining as a reference for fairness. We investigate (1) the impact of fairness concerns on the performance of a retailer-dominated supply chain and a manufacturer-dominated supply chain; (2) how demand uncertainty affects the inequitable state; and (3) how overestimated and underestimated values of fairness concerns affect supply chain performance when fairness concerns are private information. After solving the equilibrium solution of the Stackelberg game and Nash-bargaining games and numerical analyses, it is shown that unilateral fairness concerns by the Stackelberg leader or follower can motivate the leader to sacrifice its profit to reduce their income inequality by offering a coordinating wholesale price. Of course, it is also effective for both participants to be fair-minded as soon as their fairness sensitivity is moderate enough. However, followers’ fairness concerns are more effective at decreasing inequity, while leaders can improve social welfare, i.e., increase the entire supply chain’s efficiency as well as market scale. We also find that in a more uncertain market, fewer fairness-concerned participants are supposed to reach a relatively fair condition. In addition, we conclude that sometimes asymmetric information about fairness concerns can improve the profit share of the disadvantaged and even channel efficiency. This paper extends the study of Nash-bargaining fairness concerns to retailer-dominated newsvendor models and enriches the field, when fairness concerns are asymmetric information.
Funder
The National Social Science Fund of China
Subject
General Mathematics,Engineering (miscellaneous),Computer Science (miscellaneous)
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