TITLE:
Supply Chain Contract Incorporating Fairness under Asymmetric Information
AUTHORS:
Guangxing Wei, Yao Tang
KEYWORDS:
Supply Chain Contract, Asymmetric Information, Fairness
JOURNAL NAME:
Open Journal of Social Sciences,
Vol.4 No.7,
July
30,
2016
ABSTRACT: 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.