Platform supply chain decision-making under conditions of digital empowerment and fairness concerns

Purpose Insufficient resources cause many small and medium-sized manufacturers (SMMs) to struggle with digital transformation. Digital empowerment by platform enterprises, which often lead the platform supply chains (PSCs), can support SMMs in achieving transformation. However, fairness concerns implemented by SMMs to avoid potential control by these platform enterprises may negatively impact PSCs’ performance. This paper aims to study the optimal decision-making of platform supply chains under the digital empowerment of platform enterprises and the fairness concerns of SMMs. Design/methodology/approach Three models are constructed utilizing a game theory approach in this study. The impact of the digital empowerment of the platform enterprise and the fairness concerns of the SMM on the PSC are examined by comparing equilibrium results under different scenarios. Findings The SMM’s fairness concerns reduce the impact of platform digital empowerment; the level of digitalization of the PSC is also decreased. The SMM’s profit and fairness concerns exhibit an “inverted U-shaped” relationship, with the profits of the platform enterprise and the PSC declining as the level of the SMM’s fairness concerns increases. The PSC is coordinated by a profit-sharing contract. Both the PSC digitalization level and the members’ profits increase under the adoption of the contract. Originality/value This study innovatively integrates platform enterprises’ digital empowerment with SMMs’ fairness concerns. The findings provide managers with insights on balancing the effects of digital empowerment and fairness concerns to improve PSC performance and support the digital transformation of SMMs, ultimately achieving a “win-win” outcome for PSC members.