Dynamic pricing and advertising in a supply chain with environment- and fairness-concerned consumers

Elena Parilina (), Fanjun Yao () and Georges Zaccour ()
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Elena Parilina: Saint Petersburg State University
Fanjun Yao: Beijing Institute of Technology
Georges Zaccour: HEC Montreal

Central European Journal of Operations Research, 2025, vol. 33, issue 2, No 9, 473-498

Abstract: Abstract The objective of this paper is to assess the impact of disclosing environmental information and price fairness on the strategies and outcomes of a supply chain in a dynamic framework. The relevance of our work stems from the ample empirical evidence that consumers are indeed sensitive to the green reputation of a manufacturer and perceive a transaction gain (loss) when the price is below (higher) than their mental reference point. We model the supply chain as a differential game à la Stackelberg, with the manufacturer being the leader and the retailer the follower. We characterize and compare the equilibrium results for wholesale-price and revenue-sharing contracts. In particular, we check under what conditions, if any, a revenue-sharing contract can be better than a wholesale-price contract for all involved parties, that is, the supply chain members, the consumers, and the environment.

Keywords: Supply chain management; Environmental information disclosure; Reference price; Pricing and advertising strategies; Dynamic games (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10100-025-00972-1

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