Pricing Decisions in Dual-Channel Closed-Loop Supply Chain Under Retailer’s Risk Aversion and Fairness Concerns

Abstract

This paper studies the price decisions in a dual-channel closed-loop supply chain with a risk-averse retailer and a risk-neutral manufacturer by modeling and analyzing three cases: (1) the retailer does not have fairness concerns; (2) the retailer has fairness concerns and the manufacturer considers it; and (3) the retailer has fairness concerns and the manufacturer does not consider it. The effects of risk aversion and fairness concerns on the pricing decisions, profits and demand are examined in differing scenarios.