Loss Aversion Equilibrium of Bimatrix Games with Symmetric Triangular Fuzzy Payoffs

Cui, Chunsheng; Feng, Zhongwei; Tan, Chunqiao; Borkotokey, Surajit

doi:10.1007/s40815-019-00611-3

Cited by 8 publications

(4 citation statements)

References 49 publications

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“…When consumers face uncertain trading decisions, they often have expectations about prices and compare realized prices with reference points. Numerous studies in psychology and economics have shown that decision-makers are keener on minimizing losses than maximizing gains relative to reference points [15][16][17][18]. Prospect theory holds that for lossaverse decision-makers, a certain amount of losses will bring them more pain than the same amount of gains will please them [19] (Tversky and Kahneman, 1991).…”

Section: Introductionmentioning

confidence: 99%

Dual-Channel Pricing Decisions for Product Recycling in Green Supply Chain Operations: Considering the Impact of Consumer Loss Aversion

Meng

Chen

et al. 2023

IJERPH

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With the vigorous rise of online third-party recycling platforms, dual-channel recycling has become the primary recycling mode in the reverse supply chain (RSC). However, as the main body of recycling, consumers have a significant impact on the recycling process, and their behavioral preferences are rarely considered in the pricing decision of the reverse recycling supply chain. Based on the dual-channel RSC, this paper considers the competition among channels. It introduces the loss aversion behavior preference of consumers to establish a dual-channel RSC composed of remanufacturers and online and offline recyclers. This study aims to analyze the impact of consumers’ loss aversion behavior on the recycling pricing and profit of each node in the green RSC and discuss the decision of recyclers under consumers’ loss aversion behavior. The results show that the deeper consumers’ aversion to the loss of recycling price, the lower the recycling price of dual-channel recyclers will be, which will be more conducive to the increase in the profit of online recyclers. However, the profit of remanufacturers will be reduced, and the total amount of recycling will decline. This paper considers the impact of consumer loss aversion behavior on dual-channel reverse supply chain pricing decisions based on prospect theory. It provides references for chain members to set recycling prices to increase people’s enthusiasm for recycling and the amount of recycled scrap, contributes to the cause of resource conservation and environmental protection, and improves the economic efficiency of recycling enterprises.

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Section: Introductionmentioning

confidence: 99%

Dual-Channel Pricing Decisions for Product Recycling in Green Supply Chain Operations: Considering the Impact of Consumer Loss Aversion

Meng

Chen

et al. 2023

IJERPH

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“…In this version, a basic utility, a loss aversion coefficient and a reference point characterize the loss-aversion preference of decision makers: an outcome below the reference point are framed as a loss and its utility is from the basic utility by subtracting a disutility that is equal to this loss multiplied by the loss-aversion coefficient. Shalev's version has been received widespread attention in the field of game theory [24][25][26][27]. In particular, the value function and its variants that characterizes the loss-aversion preference of decision makers has been applied to supply chain decisions [28][29][30][31][32].…”

Section: Introductionmentioning

confidence: 99%

Green Supply Chain Management with Nash Bargaining Loss-Averse Reference Dependence

Feng

Tan

et al. 2021

Mathematics

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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.

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“…In 2016, Yili's total investment in green production reached about 150 million yuan (http://inews.nmgnews.com.cn/system/2017/02/10/012265324.shtml). Furthermore, abundant works in both psychological and the economic literature show that decision-makers are more motivated to minimize losses (relative to a reference point) than to maximize gains [15][16][17][18][19]. Thus, a natural assumption is that manufacturers are loss-averse.…”

Section: Introductionmentioning

confidence: 99%

Pricing, Green Degree and Coordination Decisions in a Green Supply Chain with Loss Aversion

Feng

Tan

2019

Mathematics

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The consumer environmental awareness promotes green manufacturing and the behavioral preferences of members become prevailing in supply chain management. To promote further development of green supply chains, a two-echelon green supply chain with a manufacturer and a retailer is considered, where the manufacturer is loss-averse and the retailer is risk-neutral. We use a Stackelberg game to investigate the impacts of loss aversion and green efficiency coefficient on retail price, wholesale price, green degree, profits of members, and profit of the green supply chain under the assumption that manufacturer’s reference point of loss aversion is equal to the subgame perfect equilibrium partition. It is shown that, in the centralized decision-making setting (CDS), green degree and profit of the green supply chain are higher than those in the decentralized decision-making setting (DDS), while in the decentralized decision-making setting with a loss-averse manufacturer (DDS-LAM) loss aversion of manufacturer further decreases green degree and profit of green supply chain. It is also found that profits of the manufacturer and the retailer decrease with levels of loss aversion of manufacturer. Furthermore, it is also shown that wholesale price and retail price in the three decision-making settings depend on the green efficiency coefficient. Wholesale price and retail price in DDS-LAM are always the lowest (highest) if the green efficiency coefficient is sufficiently high (low). Finally, executing a greening cost-sharing contract can improve chain members’ profits if the retailer shares an appropriate proportion with the loss-averse manufacturer.

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Loss Aversion Equilibrium of Bimatrix Games with Symmetric Triangular Fuzzy Payoffs

Cited by 8 publications

References 49 publications

Dual-Channel Pricing Decisions for Product Recycling in Green Supply Chain Operations: Considering the Impact of Consumer Loss Aversion

Dual-Channel Pricing Decisions for Product Recycling in Green Supply Chain Operations: Considering the Impact of Consumer Loss Aversion

Green Supply Chain Management with Nash Bargaining Loss-Averse Reference Dependence

Pricing, Green Degree and Coordination Decisions in a Green Supply Chain with Loss Aversion

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