Abstract

This paper investigates a single-period two-echelon supply chain with random demand, where the loss-averse preference is adopted to describe the retailer's decision-making behavior. By combining the revenue sharing (RS) contract and the buy-back (BB) contract, a new combined contract is introduced. It is shown that the combined contract could mitigate the risk-aversion effect, and coordinate the supply chain. Moreover, the effects of retailer's risk preference on agents' decision-making and profit allocation are studied. In terms of coordination and profit allocation, the combined contract presents more advantages than the RS contract and the BB contract. The numerical experiments are conducted to validate our theoretical results.

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