Differential Game Model of Closed-loop Supply Chain with Fairness Concern
In the relevant research on pricing decision of closed-loop supply chain(CLSC),most of the assump-tions are that the game participants are completely rational,whose goal is to maximize the profit,and all decisions remain unchanged with time.However,experimental studies show that when making decisions,what matters most to people is fair treatment,that is,the decision makers will pay attention to the fairness of the profit distribution.Channel reputation and various decision variables change with time,reflecting the dynamic charac-teristics regarding time change.In this paper,in the CLSC composed of a manufacturer,a retailer and two collectors,the existing research content is extended.It is assumed that the collectors may concentrate on whether the profit distribution between the collectors and the manufacturer is fair,and the strategy space is concern or not concern.The manufacturer may also contemplate the collectors'attention to fair distribution,and the strategy space is consideration or not consideration.When the fairness concern is implanted into the pricing decision of CLSC,the equilibrium solution of CLSC under four strategy combinations is discussed in infinite time zone with the Shapley value as the fairness reference point based on the differential game theory.What the research shows is that the intense competition will contribute to the reduction of efficiency of the CLSC,so the leader manufacturer makes it a point to control the intensity of the competition in the channel;the recycling effort level changes not only the pricing decisions of reverse channel but also of forward channel;com-pared with the model where the fairness concern of collectors is"passively"considered,when the manufacture"actively"considers the fairness concern of the collectors,the transfer payment is the smallest,while the collec-tors pay more recycling effort,providing the best reputation for the CLSC recycling channel.The profits of the manufacturer,the retailer and the collectors have been improved,and more used products are recycled,which is conducive to the sustainable development of the CLSC.The research results help enterprises to understand the influence of fairness preference on economic decision-making.Distinguishing from the static environment where any strategic combination cannot benefit multiple parties,in the dynamic environment,combination of strategies can do so.Therefore,our research conclusions enrich the existing research results,but this paper neglects the robustness of the equilibrium solution of the CLSC system,and only implants the distribution fairness concern in the pricing decision of the CLSC.The follow-up research will implant multiple fairness concerns of the collectors,and meanwhile explore the robustness of the equilibrium solution of the system.
closed-loop supply chainfairness concernreputationdifferential game