Supply chain decisions under asymmetric information with cost and fairness concern

ABSTRACT

The two-echelon supply chain including single supplier and single retailer is set, and we study the compact of asymmetric information on the decisions in the supply chain when the both supplier’s private cost information and retailer’s private fairness-concern information are asymmetry between the supply chain members, so as to study the effect of misreporting behavior and fairness concern on the supply chain. By mathematical model derivation and numerical analysis, we prove that the misreporting behavior of supplier will intensify the unfair distribution of supply chain and thus make the supply chain operation further deviate from the optimal condition.

KEYWORDS:

• Bilateral-information asymmetry
• fairness concern
• misreporting
• cost

Acknowledgments

The research is supported by Chinese Social Science Fundation ‘Contract optimization and coordination of supply chain based on social preference and its cognitive dynamic evolution’ under Grant Number 16CGL017.

Disclosure statement

We declare that there is no conflict of interest regarding the publication of the paper "Supply Chain Decisions under Asymmetric Information with Cost and Fairness Concern.

Additional information

Funding

This work was supported by the Chinese Social Science Fundation [16CGL017].