scholarly journals Quality and Pricing Decisions in a Two-Echelon Supply Chain with Nash Bargaining Fairness Concerns

2018 ◽  
Vol 2018 ◽  
pp. 1-19 ◽  
Author(s):  
Ji-cai Li ◽  
Ji-hong Lu ◽  
Qi-liang Wang ◽  
Changwen Li
Keyword(s):  
Supply Chain ◽  
Product Quality ◽  
Bargaining Power ◽  
Reference Points ◽  
Nash Bargaining ◽  
Quality Level ◽  
Pricing Strategies ◽  
Pricing Decisions ◽  
Decision Structure ◽  
Fairness Concern

Product quality and pricing, as the important competitive tools, play a key role in attracting consumers. In a supply chain, the decisions on product quality and pricing are usually interlinked and would influence the cooperation relation between the members, especially when they are fairness-concerned and have different bargaining power. However, linking the quality and pricing decisions to the decision-makers’ behavioral factors such as fairness concern draws a little attention in the literature of supply chain management. This paper incorporates the members’ fairness preference and bargaining power into the product quality and pricing decisions in a two-echelon supply chain, where the supplier offers core components with a certain quality level to the downstream manufacturer, who subsequently sells the final products in the end market. Both the supplier and the manufacturer are assumed to be fairness-concerned by adopting Nash bargaining solutions as their fairness reference points. We use game-theoretic models to analyze the equilibrium product quality and pricing strategies under the setting of integrated and decentralized supply chain, respectively. Detailed comparisons and sensitivity analysis are further conducted to examine the impacts of members’ strengths of fairness concern, bargaining power, and decision structure on their equilibrium product quality and pricing strategies and corresponding payoffs.

scholarly journals Low carbon joint strategy and coordination for a dyadic supply chain with Nash bargaining fairness

2022 ◽  
Vol 0 (0) ◽  
pp. 0
Author(s):  
Jianxin Chen ◽  
Lin Sun ◽  
Tonghua Zhang ◽  
Rui Hou
Keyword(s):  
Supply Chain ◽  
Cost Sharing ◽  
Bargaining Power ◽  
Unit Cost ◽  
Revenue Sharing ◽  
Nash Bargaining ◽  
Low Carbon ◽  
Joint Decision ◽  
Effort Level ◽  
Fairness Concern

<p style='text-indent:20px;'>In the paper, fairness concern criterion is utilized to explore the coordination of a dyadic supply chain with a fairness-concerned retailer (acting as a newsvendor), who is committed to low carbon efforts. Two models are developed for stochastic demand disturbances in the forms of multiplicative case and additive case, respectively. Firstly, the optimal joint decision of the retailer and the supply chain are proposed in two scenarios, i.e., decentralized decision and the centralized decision. Secondly, in order to realize channel coordination, the contract of revenue sharing combined with the mechanism of low-carbon cost sharing is designed. Moreover, the influences of the retailer's fairness concern and bargaining power on the joint decision and the contract parameters are also investigated. Finally, numerical examples are given to illustrate the theoretical results and some suggestions to supply chain management are also provided. The results show that the revenue sharing contract can make the supply chain achieved coordination with the cost sharing mechanism of low-carbon efforts. Furthermore, the optimal low-carbon effort level and ordering quantity decrease in terms of fairness-concerned parameter and Nash bargaining power parameter, which increases in unit cost. However, the optimal pricing makes the opposite change.</p>

scholarly journals Joint Innovation Investment and Pricing Decisions in Retail Supply Chains with Customer Value

2021 ◽  
Vol 13 (3) ◽  
pp. 1309
Author(s):  
Jiali Qu ◽  
Benyong Hu ◽  
Chao Meng
Keyword(s):  
Supply Chain ◽  
Cooperative Game ◽  
Customer Value ◽  
Business Models ◽  
Value Added ◽  
Revenue Sharing ◽  
Nash Bargaining ◽  
Product Price ◽  
Pricing Decisions ◽  
Game Equilibrium

In the retail industry, customer value has become the key to maintaining competitive advantages. In the era of new retail, customer value is not only affected by the product price, but it is also closely related to innovations, such as value-added services and unique business models. In this paper, we study the joint innovation investment and pricing decisions in a retailer–supplier supply chain based on revenue sharing contracts and customer value. We first find that, in the non-cooperative game, equilibrium only exists in the supplier Stackelberg game. However, revenue sharing contracts cannot coordinate the supply chain in the non-cooperative game. By considering supply chain members’ bargaining power, we find that there exists a unique equilibrium for the Nash bargaining product. In addition, revenue sharing contracts can coordinate the supply chain and achieve the optimal consumer surplus. When the supply chain is coordinated, supply chain profit is allocated to the supply chain members based on their bargaining powers.

scholarly journals Pricing Strategies in Dual-Channel Reverse Supply Chains Considering Fairness Concern

2019 ◽  
Vol 16 (9) ◽  
pp. 1657 ◽  
Author(s):  
Di Wu ◽  
Juhong Chen ◽  
Ruyu Yan ◽  
Ruijun Zhang
Keyword(s):  
Supply Chain ◽  
Transfer Price ◽  
Internet Technology ◽  
Supply Chain System ◽  
Chain System ◽  
Pricing Decisions ◽  
Dual Channel ◽  
Fairness Concerns ◽  
Fairness Concern ◽  
Offline Channels

The fierce competition in the recycling industry and the rapid development of internet technology has prompted recycling centers to develop a dual-channel reverse supply chain with both offline and online recycling channels. After the introduction of online channels, recycling centers and third-party recyclers (TPR) have paid attention to the division of profits in supply chain systems and the behavior of fairness concerns. Therefore, it is necessary to help recycling enterprises make pricing decisions in consideration of fairness concerns. This paper is aimed at answering the following two main questions: (1) When the recycling center or TPR have fairness concerns, how does the optimal pricing and revenue of supply chain members change when both sides are neutral? (2) When the fairness concern coefficient changes, how does the overall revenue of the supply chain system change? How should supply chain members adjust their pricing decisions to maximize their own profits? In order to solve the above problems, Stackelberg game models were made from three aspects: both sides are neutral, only the TPR has fairness concerns, and only the recycling center has fairness concerns. Based on the results of the example analyses for the model, we found that when only the TPR has fairness concerns, the profit of the recycling center and the transfer price of offline channels will decrease, while the profit of TPR is the opposite. Furthermore, when only a recycling center has fairness concerns, it will lead to the reduction of not only the recycling price and transfer price of offline channels, but also the profits of the entire supply chain system. Specially, whether it is for a recycling center or TPR, a lower level of fairness concern coefficient has a stronger impact on pricing and revenue than at high levels.

Game-Theoretic Analysis of Pricing Models in a Dyadic Supply Chain With Fairness Concerns

2019 ◽  
Vol 10 (2) ◽  
pp. 1-24 ◽  
Author(s):  
Abhishek Sharma
Keyword(s):  
Supply Chain ◽  
Stackelberg Game ◽  
Channel Coordination ◽  
Theoretic Analysis ◽  
Nash Game ◽  
Game Theoretic Analysis ◽  
Pricing Decisions ◽  
Fairness Concerns ◽  
Game Theoretic ◽  
Fairness Concern

The existing studies on fairness in channel coordination assume markets as the group of oligopolies in which a few firms dominate, scant evidence has been provided where fairness concerns are investigated for a market scenario where all firms share equal dominance. This article considers a dyadic supply chain composed of one fair-minded manufacturer and one fair-minded retailer and investigate their pricing decisions under two different non-cooperative game-theoretic frameworks: manufacturer-led Stackelberg game and Vertical Nash game and provide a comparative analysis. The results show that the prices of the Stackelberg game model are always higher than that of the corresponding prices of the Vertical Nash game. We also find that the prices gap between the two models decreases with the retailer's fairness concern, and is uncertain with respect to manufacturer's fairness. In addition, the manufacturer's (retailer's) profit in the Stackelberg game is decreasing (increasing) in its own fairness and is uncertain in the Vertical Nash game. Furthermore, findings are illustrated through a numerical example.

scholarly journals Subgame Perfect Equilibrium in the Rubinstein Bargaining Game with Loss Aversion

Complexity ◽  
2019 ◽  
Vol 2019 ◽  
pp. 1-23 ◽  
Author(s):  
Zhongwei Feng ◽  
Chunqiao Tan
Keyword(s):  
Loss Aversion ◽  
Reference Point ◽  
Bargaining Power ◽  
Subgame Perfect Equilibrium ◽  
Reference Points ◽  
Bargaining Game ◽  
The Other ◽  
Nash Bargaining ◽  
Perfect Equilibrium ◽  
High Share

Rubinstein bargaining game is extended to incorporate loss aversion, where the initial reference points are not zero. Under the assumption that the highest rejected proposal of the opponent last periods is regarded as the associated reference point, we investigate the effect of loss aversion and initial reference points on subgame perfect equilibrium. Firstly, a subgame perfect equilibrium is constructed. And its uniqueness is shown. Furthermore, we analyze this equilibrium with respect to initial reference points, loss aversion coefficients, and discount factor. It is shown that one benefits from his opponent’s loss aversion coefficient and his own initial reference point and is hurt by loss aversion coefficient of himself and the opponent’s initial reference point. Moreover, it is found that, for a player who has a higher level of loss aversion than the other, although this player has a higher initial reference point than the opponent, this player can(not) obtain a high share of the pie if the level of loss aversion of this player is sufficiently low (high). Finally, a relation with asymmetric Nash bargaining is established, where player’s bargaining power is negatively related to his own loss aversion and the initial reference point of the other and positively related to loss aversion of the opponent and his own initial reference point.

scholarly journals Bargaining Power Choices with Moral Hazard in a Supply Chain

2018 ◽  
Vol 2018 ◽  
pp. 1-9 ◽  
Author(s):  
Hongmei Guo ◽  
Shuiliang Gu ◽  
Yingsheng Su
Keyword(s):  
Numerical Simulation ◽  
Supply Chain ◽  
Moral Hazard ◽  
Power Allocation ◽  
Bargaining Power ◽  
Nash Bargaining ◽  
Supply Chain Contract ◽  
Nash Bargaining Game ◽  
Information Problem ◽  
Theoretical Results

A supply chain contract is established using a dynamic, Nash bargaining game which determines the optimal bargaining power allocation for the manufacturer, retailer, and society in an environment affected by moral hazard and irreversible investment. The results found that the manufacturer’s choice was to hold all bargaining power; however, due to the remaining information problem, the retailer still had a profit; in contrast, the retailer was only willing to give up bargaining power if the manufacturer’s profit was reserved. The optimal bargaining power allocation was found to be strongly related to the ability to convert and monitor technology, with the bargaining power gradually shifting to the manufacturer as the technology improved. A numerical simulation is given to examine the theoretical results.

Price strategies and salesforce compensation design with overconfident sales agent

2020 ◽  
Vol 54 (5) ◽  
pp. 1347-1368
Author(s):  
Chen Kegui ◽  
Wang Xinyu ◽  
Huang Min ◽  
Song Xuefeng
Keyword(s):  
Sensitivity Analysis ◽  
Supply Chain ◽  
Comparative Studies ◽  
Pricing Strategies ◽  
Numerical Illustration ◽  
Pricing Decisions ◽  
Long Period ◽  
Sales Agent ◽  
Salesforce Compensation ◽  
Compensation Design

Salesforce compensation and pricing decisions have invoked the interest of several academicians and practitioners for a long period of time. However, dilemma of whether the pricing decisions should be made by the firm or delegated to the sales agent, especially the overconfident agent, is still unexplored. This study tries to investigate the problems associated with this dilemma by conducting a thorough study of the scenario, it studies a supply chain that the rational manufacturer hiring an overconfident sales agent to sell its products, the agent might overestimate the demand, or underestimate the variability of the demand. These behaviors are characterized as ability-based and precision-based overconfidence respectively. The models are designed for centralized pricing and delegated pricing settings, and the sensitivity analysis are conducted. Moreover, comparative studies have also been conducted to highlight the impacts of the two types of overconfidence on the compensation decisions under different pricing strategies. It was found out that, the manufacturer favors centralized pricing, while the sales agent prefers delegated pricing. The final decisions of both sides deviate considerably from the rational scenario, overconfidence prompts the agent to exert more efforts, which ultimately enhances manufacturer’s profits that the manufacturer should hire a more overconfident agent, while not guaranteeing a higher commission rate. Overconfidence leads to the decline of the agent’s actual utility, and the loss amount increases with the overconfidence level. The influences of the both types of overconfidence are substitutable. Managerial insights are also provided for various scenarios and propositions along with numerical illustration of the finding.

PRICING DECISIONS FOR A CLOSED-LOOP SUPPLY CHAIN IN A FUZZY ENVIRONMENT

2012 ◽  
Vol 29 (01) ◽  
pp. 1240003 ◽  
Author(s):  
JIE WEI ◽  
JING ZHAO ◽  
YONGJIAN LI
Keyword(s):  
Supply Chain ◽  
Closed Loop ◽  
Wholesale Price ◽  
Retail Price ◽  
Economic Behavior ◽  
Optimal Pricing ◽  
Pricing Strategies ◽  
Closed Loop Supply Chain ◽  
Pricing Decisions ◽  
Fuzzy Environment

This paper studies pricing problem for a closed-loop supply chain consisting of a manufacturer and a retailer in a fuzzy environment. The purpose of this paper is to explore how the manufacturer makes his decisions about wholesale price and transfer price and how the retailer makes her decisions about retail price and collecting price in the expected value standard. Each firm's optimal pricing strategies are established by using game theory under the centralized and decentralized decision cases, respectively. Managerial insights into the economic behavior of firms are also investigated, which can serve as the basis for empirical study in the future. Moreover, we analyze numerically the results and give some insights on the influence of some parameters.

scholarly journals Pricing Decisions in Closed-Loop Supply Chains with Competitive Fairness-Concerned Collectors

2020 ◽  
Vol 2020 ◽  
pp. 1-15
Author(s):  
Yadong Shu ◽  
Ying Dai ◽  
Zujun Ma
Keyword(s):  
Supply Chain ◽  
Shapley Value ◽  
Closed Loop ◽  
Pricing Decisions ◽  
Closed Loop Supply Chains ◽  
Competitive Strength ◽  
Pricing Decision ◽  
Utility System ◽  
Fairness Concerns ◽  
Fairness Concern

Based on the Shapley value fairness concern framework, a fairness concern utility system is established for the closed-loop supply chain (CLSC) with one manufacturer, one retailer, and two competitive collectors. Under the five models (one centralized and four decentralized), the influence of competitive strength and fairness concern degree of collectors on the pricing decisions is analyzed. The following conclusions can be obtained: (1) When the manufacturer considers the fairness concern of the collectors, fairness concern is a way for the collectors to obtain more profit. Whether the manufacturer “proactively” considers the fairness concern of the collectors is an approach to benefiting the collectors but only in the case of “active” consideration, there is less self-loss to the manufacturer. (2) When the collectors’ fairness concern cannot be considered by the manufacturer, the equilibrium recycling price sets lower for the purpose of achieving more profit by the collectors. At this point, the profit of the collectors and the manufacturer is the lowest, and so is the return rate of the CLSC. (3) When the collectors do not care about whether they are being fairly treated but the manufacturer “actively” takes the fairness of the collectors into consideration, the collectors get “unexpected” attention from the manufacturer, which makes the performance of the collectors more positive than it is when their fairness concerns are taken into account. The profit increased by the collectors is more than that lost by the manufacturer, so the profit of the CLSC is the largest. Additionally, our findings provide some managerial insights on the pricing decision in the case where the collectors consider fairness concern.

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