Abstract
The paper considers the impact of consumer environmental awareness (CEA) and manufacturer’s fairness concern on wholesale price and retail price in supply chain. We discuss two decision scenarios: decentralized model (scenario 1), manufacturer is concerned about disadvantageous inequity (scenario 2). Our analysis shows that: (1) when manufacturer is fair-minded, he wants to risk losses in favor of splitting the channel profit equally; (2) without fairness concern, both members’ profits increase with CEA; however, with fairness concern, both members’ profits may decrease with CEA; (3) compared with decentralized model, in case 2, manufacturer’s profits decline inevitably while retailer’s profits have half the chance to increase; manufacturer will not remove unfairness, but even risk losses.
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