A game-theoretical approach for supply chain coordination under fairness preference

In recent years, fairness preference has been increasingly emphasized in the studies of game experiments. However, how to develop effective game-theoretical models for supply chain coordination (SCC) under fairness preference remains an open question. In this paper, we considered a supply chain with one manufacturer and one retailer and analyzed the impact of fairness preference on SCC under several games. Under the (non-cooperative) Stackelberg game, both agents are assumed to play both roles as the leader and the follower, and make decisions to maximize their own utilities without fairness preference. Under the cooperative game, the objective of SCC is to maximize the total social welfare when fairness preference is not involved. In fair games under cooperative environment, both agents realize the possible negative effects caused by the fairness preference when maximize their own utilities. In such a case, we derived a Pareto efficient solution. Finally, the optimal decisions under different cases are compared.