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Chinese Journal of Management Science ›› 2014, Vol. 22 ›› Issue (3): 51-58.

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Differential Pricing Strategy of Considering Retailer’s Fairness Concerns in the Closed-Loop Supply Chain

ZHANG Ke-yong1, WU Yan1, HOU Shi-wang2   

  1. 1. School of Economics and Management, North University of China, Taiyuan 030051, China;
    2. School of Mechanical engineering and Automation, North University of China, Taiyuan 030051, China
  • Received:2012-09-14 Revised:2013-07-29 Online:2014-03-20 Published:2014-03-19

Abstract: In this paper, differential price strategies of the closed-loop supply chain for considering fairness concerns behavior are studied, and two different price models are constructed under two different situations in which the manufacturer considers retailer's behavior of fairness concerns or the manufacturer doesn't consider retailer's behavior of fairness concerns. Differential price models are analyzed by game theory. The results show that the retailer's fairness concerns behavior tendencies affect to some degree the differential price strategies as well as the profits of the retailer and manufacturer, and the end-of-life recycling quantity. The manufacturer makes more benefits when he considers the retailer's behavior of fairness concerns than he doesn't, and so on its will increase the amount of recycling waste products of the closed-loop supply chain system and in favor of resource recycling and reusing when the retailer is fairness concerns. The study shows that the behavior of fairness concerns is an effective measure for the retailer to obtain the channel distribution of gains, but the efficiency of the closed-loop supply chain decreases at the same time.

Key words: closed-loop supply chain, fairness concerns, differential pricing, stackelberg game

CLC Number: