The revenue-sharing contract of Stackelberg game under fairness concern

The revenue-sharing contract model of Stackelberg game is set for a two-echelon supply chain, consisting of one retailer and one supplier. Given the constant coefficient of revenue-sharing contract, the optimal wholesale price strategy of the supplier and the optimal order strategy of the retailer is analyzed when neither supplier and retailer care about fairness, only the retailer cares about fairness, only the supplier cares about fairness and both of them care about fairness, respectively. The fairness solution of the Nash bargaining is employed as a reference to judge the equity of allocating benefits in the supply chain so as to analyze whether the revenue-sharing contract can coordinate the supply chain and the compact of fairness behavior on the wholesale price. It is found that when both the supplier and retailer are in Stackelberg game, whether they care about fairness, the revenue-sharing contract can't coordinate the supply chain because the optimal wholesale price of the supplier in the game is always higher than that in a coordinated supply chain. Moreover, when the retailer cares about fairness, the wholesale price will decrease in retailer's fairness and increase in supplier's fairness.