• OpenAccess
  • Supply Chain Contract Incorporating Fairness under Asymmetric Information  [MASS 2016]
  • DOI: 10.4236/jss.2016.47005   PP.35 - 39
  • Author(s)
  • Guangxing Wei, Yao Tang
  • This paper obtains optimal settings of each parameter on a supply chain composed of a rational manufacturer and a fair retailer. Through the establishment of model under information symmetry and information asymmetry, in which the effort level of retailer can’t be observed by manufacturer, the impact of retailer’s fairness on his effort level and manufacturer’s utility are explored and investigated. From the comparison, this paper find that retailer’s effort level and manufacturer’s utility under information asymmetry are higher than those under information symmetry, and the difference is directly proportional to the degree of retailer’s fairness. Retailer’s fairness has positive effect on his effort level and manufacture’s utility under information asymmetry, and manufacturers tend to cooperate with the retailer who has higher degree of fairness.

  • Supply Chain Contract, Asymmetric Information, Fairness
  • References
  • [1]
    Wen, C.Z. and Ji, J.H. (2015) Buyback Contract Model with Sales Effort and Price Interference. Logistics Technology, 34, 145-148.
    Xiao, Q. and Ma, S.H. (2015) Supply Chain Contract with Asymmetric Information on Promotional Effort Cost. Operations Research and Management Science, 24, 27-34.
    Zhou, Y.W. and Liu, Z.R. (2012) Ordering Decision and Coordination of Overconfident Retailer Based on Newsvendor Model. Operations Research and Management Science, 21, 62-66.
    Chen, Q. and Yang, X.T. (2007) Principal-Agent Model Based on Overconfident Agent. Journal of Industrial Engineering/Engineering Management, 21, 110-116.
    Pu, X.J., Gong, L. and Zhang, X. (2015) Incentive Mechanism Design for Promotion Effort Considering the Retailer’s Fairness. Systems Engineer-ing-Theory & Practice, 35, 2271-2279.
    Xu, Y.F., Liu, Z.R. and Wang, H.J. (2014) Supply Chain Contract with an Overconfident Retailer under Information Asymmetry. Operations Research and Management Science, 23, 113-118.
    Fehr, E. and Schmidt, K.M. (1999) A Theory of Fairness, Competition, and Cooperation. Quarterly Journal of Economics, 114, 817-868.

Engineering Information Institute is the member of/source content provider to