Effect of fairness preference on dual-channel supply chain

For a dual-channel supply chain with a manufacturer and a retailer, fairness preference utility function are established. Then this paper examine the optimal direct selling price, the wholesaling price and the retailing price under three conditions: only the retailer concerns about fairness, only the manufacturer concerns about fairness, and both partners concern about fairness. At last, the numerical example is presented to analyze the coeffiencent of fairness preference on decision-makers' profit and utility.