Traditional economics is built on the basis of human self-interest rationality and the mainstream supply chain coordination research follows this hypothesis to design a series of coordination contracts, such as buy-back, quantity discounts, and revenue sharing and so on. However, Behavioral economics holds that people care not only their own profits but also others'. Therefore, Social preference is one of the most important factors by which human beings make their behavioral decisions, such as the supply chain coordination decision. Some scholars find that the buy-back, revenue sharing contracts etc. could not help achieve supply chain coordination. Therefore, researchers have begun to consider whether social preferences impact supply chain coordination and brought some research findings which could better explain the economy problems. For example, a simple wholesale pricing contract could coordinate the supply chain while considering the fairness preference which interprets why wholesale price exists in the market for a long time.
In this paper, the pricing decision and performance of supply chain members with fair preference is studied in the vertical supply chain and horizontal supply chain. The vertical supply chain is a two-level supply chain which contains a supplier and a retailer. While the horizontal supply chain consists of two manufacturers which belong to the same level of a supply chain, they sale the product or service together to the next supply chain level or the end market. The above supply chain's pricing and performance is studied through the backward induction. The results show that:in the vertical supply chain, the supplier or retailer with fair preference takes Stackelberg game, and the wholesale price contract can satisfy the fair preference of the supplier or the retailer, the whole supply chain gets the best profit and the highest efficiency; in the horizontal supply chain, the manufacturers with fair preference take Cournot game, and the wholesale price contract cannot satisfy the fair preference of the manufacturers, But the profit and performance of the entire supply chain is significantly higher than the profit and performance of the supply chain under complete rationality. Finally, a numerical example is given, and some management recommendations are put forward.
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