Research On Pricing Strategy Of Considering Retailer’s Fairness Concerns In The Dual-channel Supply Chain

With the rapid development of computer technology, the third-part logistics and E-commerce, more and more enterprises use the dual channel supply chain model. They keep the traditional retail channels, and set up network direct channels at the same time. The new supply chain structure is a challenge to both theory and industry. Under the dual channel supply chain model, channel conflict is inevitable, and pricing is the key factors to cause the channel conflict, so pricing is becoming a hot problem for scholars. At present, the study of the scholars is based on the assumption that supply chain members are completely rational. However, in reality, it is difficult for the decision makers to make totally rational decisions because of the fairness concerns. So this article will study on the pricing strategy of considering retailer’s fairness concerns in the dual-channel supply chain.Firstly, this paper studies the dual-channel supply chain literature at home and abroad, on this basis, the retailer’s fairness concerns is introduced into the dual-channel supply chain combining with the latest research results of behavioral economics, and thus form this paper’s topic.Secondly, this paper builds the model based on the assumption that the manufacture considers the retailer’s fairness concerns. On this basis, we calculate the equilibrium strategies of the dual- channel supply chain under two different situations that the wholesale price is endogenous and the wholesale price is exogenous. After that, comparing with the equilibrium strategies when the supply chain members has no fairness concerns, we get the impact that the retailer’s fairness concerns has on the channel price, sales quantity and supply chain members’ profits under this situation.Thirdly, this paper builds the model based on the assumption that the manufacture doesn’t consider the retailer’s fairness concerns. On this basis, we calculate the equilibrium strategies of the dual-channel supply chain under two different situations that the wholesale price is endogenous and the wholesale price is exogenous. After that, comparing with the equilibrium strategies when the supply chain members has no fairness concerns, we get the impact that the retailer’s fairness concerns has on the channel price, sales quantity and supply chain members’ profits under this situation. Furthermore, we compare and analyse the equilibrium strategies in different cases that the supply chain members has no fairness concerns, the retailer’s fairness concerns information is complete and the retailer’s fairness concerns information is private.Finally, we use the Matlab software to do the simulation analysis in order to verify the conclusions and apply the model to the actual case. Apart from that, we point out the limitations of this study and the research directions in the future.