Operational Decisions of Supply Chains with Blockchain Investment Under Fairness Preference

Purpose/Significance This paper studies the operational decisions of supply chains with blockchain investment under fairness preference, which is the guidance for the supply chain members’ decisions of service effort level, retail price and order quantity. Design/Methodology We consider a two-stage supply chain consisting of a manufacturer and a retailer, and the manufacturer is the Stackelberg leader and invests in the service effort about blockchain technology. We use backward induction to obtain the equilibrium solutions under different situations, and study the influences of fairnes preference parameter on the profits of supply chain members and manufacturer’s service effort level. Conclusions/Findings It is found that the retailer’s profits increase with the retailer’s envy preference parameter, and also increase with the manufacturer’s sympathy preference parameter. The manufacturer’s profits decrease with the retailer’s envy preference parameter, and also decrease with the manufacturer’s sympathy preference parameter. Then, the manufacturer’s service effort level decreases with the manufacturer’s sympathy preference parameter, but it is not affected by the retailer’s envy preference parameter. That is to say, the manufacturer’s service effort level is only sensitive to the manufacturer’s sympathy preference.