This paper investigates a two-echelon green supply chain (GSC) with a single loss-averse manufacturer and a single loss-averse retailer. Since the Nash bargaining solution exactly characterizes endogenous power and the contribution of the GSC members, it is introduced as the loss-averse reference point for the GSC members. Based on this, a decision model of the two-echelon GSC with loss aversion is formulated. The optimal strategies of price and product green degree are derived in four scenarios: (a) the centralized decision scenario with rational GSC members, namely the CD scenario; (b) the decentralized decision scenario with rational GSC members, namely the DD scenario; (c) the decentralized decision scenario with the GSC members loss-averse, where the manufacturer’s share is below its own loss-averse reference point, namely the DD(∆m ≥ πm) scenario; (d) the decentralized decision scenario with the GSC members loss-averse, where the retailer’s share is below its own loss-averse reference point, namely the DD(∆r ≥ πr) scenario. Then, a comparative analysis of the optimal strategies and profits in these four scenarios is conducted, and the impacts of loss aversion and green efficiency coefficient of products (GECP) on the GSC are also performed. The results show that (i) GECP has a critical influence on the retail price and the wholesale price; (ii) the GSC with loss aversion provide green products with the lowest green degree; (iii) the retail price, the wholesale price and product green degree are decreasing monotonically with the loss aversion level of the GSC member without incurring loss; (iv) furthermore, the effect of the loss aversion level of the GSC member with incurring loss on the optimal strategies is related to GECP and the gap between the GSC members’ loss aversion levels.
The classical Bertrand game is assumed that players are perfectly rational. However, many empirical researches indicate that people have bounded rational behavior with fairness concern, which is important in the two-person game and has attracted much attention. In this paper, fairness concern is incorporated into the Bertrand game with two homogeneous products and the effect of fairness concern on this extended Bertrand game is explored. Nash bargaining solution of player is applied to be his own fairness reference point. Then, a Bertrand game model with fairness concern is established, and its equilibrium price is also derived and analyzed. It is shown from some numerical examples that fairness concern and bargaining power of players have a significant influence on their equilibrium price, expected profits, and utilities. As a player gets more fair-minded, if the other player has a less focus on fairness, the price competition between them will be intensified and both of them suffer loss. Thus, fairness concern may be advantageous or disadvantageous for players. In most situations, the fairness concern behavior is not beneficial for players. Additionally, the effect of bargaining power is relative to fairness concern. A player who manufactures a low-cost product should have a weak bargaining power if he terribly focuses on fairness and should have a strong bargaining power if he pays little attention to fairness. However, a player who manufactures a high-cost product should have a weak bargaining power if he is rarely concerned about fairness. Anyway, the same bargaining power is the best for two players.
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