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Rawlsian fairness in push and pull supply chains
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Jiang, Yanmin, Wu, Xiaole, Chen, Bo and Hu, Qiying (2021) Rawlsian fairness in push and pull supply chains. European Journal of Operational Research, 291 (1). pp. 194-205. doi:10.1016/j.ejor.2020.09.016
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WRAP-Rawlsian-fairness-push-pull-supply-chains-Chen-2020.pdf - Accepted Version Embargoed item. Restricted access to Repository staff only until 19 September 2022. Contact author directly, specifying your specific needs. - Requires a PDF viewer. Available under License Creative Commons Attribution Non-commercial No Derivatives 4.0. Download (1363Kb) |
Official URL: https://doi.org/10.1016/j.ejor.2020.09.016
Abstract
We study a dyadic supply chain with firms following the Rawlsian principle of fairness and examine its impact on chain performance and firms' profits. Different from the inequality-aversion model in the distributional fairness literature, the participants with the Rawlsian fairness concern maximize the profit of the disadvantageous party according to their own fairness criteria. Our results show that the Rawlsian principle adopted by individual firms can achieve not only fairness but also Pareto efficiency. By studying both push and pull supply chains, we find that what matters is the decision sequence between the manufacturer and the retailer. The fair-minded Stackelberg follower can induce the Stackelberg leader, no matter fair-minded or not, to offer a coordinating wholesale price. The chain coordination can be achieved only if the follower is not too demanding (i.e., it does not demand an excessively high portion of chain profit according to its fairness criterion). Additionally, a win-win outcome can be achieved, provided the follower is not too humble. All else being equal, the win-win region is larger with a higher demand uncertainty. Last but not least, we compare our results with those under the inequality-averse fairness model on a push supply chain and find that the parameter ranges of coordination and win-win are wider when the participants follow the Rawlsian principle of fairness.
| Item Type: | Journal Article | ||||||||
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| Subjects: | H Social Sciences > H Social Sciences (General) | ||||||||
| Divisions: | Faculty of Social Sciences > Warwick Business School > Operational Research & Management Sciences Faculty of Social Sciences > Warwick Business School |
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| Library of Congress Subject Headings (LCSH): | Business logistics, Fairness, Industrial procurement -- Management, Inventory control, Delivery of goods -- Management | ||||||||
| Journal or Publication Title: | European Journal of Operational Research | ||||||||
| Publisher: | Elsevier Science BV | ||||||||
| ISSN: | 0377-2217 | ||||||||
| Official Date: | 16 May 2021 | ||||||||
| Dates: |
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| Volume: | 291 | ||||||||
| Number: | 1 | ||||||||
| Page Range: | pp. 194-205 | ||||||||
| DOI: | 10.1016/j.ejor.2020.09.016 | ||||||||
| Status: | Peer Reviewed | ||||||||
| Publication Status: | Published | ||||||||
| Access rights to Published version: | Restricted or Subscription Access | ||||||||
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