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Who Benefits from Altruism in Supply Chain Management?

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Author(s): Zehui Ge | Qiying Hu

Journal: American Journal of Operations Research
ISSN 2160-8830

Volume: 02;
Issue: 01;
Start page: 59;
Date: 2012;
Original page

Keywords: Supply Chain Management | Coopetition | Altruistic Preference | Advertising/Sales Effort | Pricing

ABSTRACT
The significant effect of social preference on strategic behavior has been convinced by recent research. Along this stream of research, we study firms’ altruistic incentives in supply chains since the selfish rationality can’t deal with economic behaviors. We show that the performance of the supply chain in consideration of altruism is between those of scenarios under decentralization and under integration. We further shows that a manufacturer, as a leader, should find an egoistic retailer, while a retailer, as a follower, should find a manufacturer with altruistic liability, to form a good chain.
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