The Impacts of Fairness Concern and Different Business Objectives on the Complexity of Dual-Channel Value Chains

Abstract

is paper considers a Stackelberg game model in a dual-channel supply chain, which is composed of a manufacturer and a retailer. e manufacturer and retailer consider fairness concern in the market competition, and the manufacturer takes market share and profit as his/her business objectives. e entropy complexity and dynamic characteristic of the dual-channel system are analyzed through mathematical analysis and numerical simulation, such as local stability, bifurcation, entropy, and chaos. e results show that, with the increase of price adjustment speed, the dual-channel supply chain is more complex and falls into a chaotic state in which system entropy increases; the stability of the dual-channel supply chain will be robust with the increase of weight of market share and weaken with the increase of the fairness concern level of the manufacturer and retailer. e high level of fairness concern of the manufacturer and retailer is always disadvantageous to the leading manufacturer but not always bad for the follower retailer. e performance of the dual-channel supply chain is improved with a high level of the manufacturer's fairness concern and reduced with a high level of the retailer's fairness concern. We also find the retailer will gain more profits in the chaotic state than the stable state in the Stackelberg game model. e variable feedback control method is applied to control the chaos of the dual-channel supply chain, and choosing appropriate control parameters can make the dual-channel supply chain system return to the stable state from the chaotic state, or delay the system to enter the bifurcation state. e research results can provide a guideline for enterprise decision-making.

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