Research on contract coordination of supply chain under dual behavior preference based on Stackelberg model

Based on the Stackelberg model between suppliers and retailers, fairness concern and loss avoidance are introduced into suppliers and retailers in supply chain. This paper discusses whether the balance of supply chain can be realized through the repurchase contract and repurchase-revenue sharing contract when they have dual psychological preferences. Establishing utility functions based on two different contracts, combined with the expression of utility functions, discuss the feasibility and necessary conditions of pursuing utility maximization and realizing supply chain coordination when supply chain members have dual preferences. Through the derivation of mathematical model and the analysis of numerical examples, it is concluded that suppliers and retailers with dual behavior preference can achieve supply chain coordination through repurchase contract when they have a certain degree of fairness concern and loss avoidance, but can not achieve supply chain coordination through repurchase-revenue sharing contract. In this process, the utility of the two sides will also change with the degree of their fair concerns and loss avoidance. Whether the two parties can realize their interest is the key to the final cooperation.