Marketing Papers

Document Type

Journal Article

Date of this Version

8-2007

Publication Source

Management Science

Volume

53

Issue

8

Start Page

1303

Last Page

1314

DOI

10.1287/mnsc.1060.0697

Abstract

We incorporate the concept of fairness in a conventional dyadic channel to investigate how fairness may affect channel coordination. We show that when channel members are concerned about fairness, the manufacturer can use a simple wholesale price above her marginal cost to coordinate this channel both in terms of achieving the maximum channel profit and in terms of attaining the maximum channel utility. Thus, channel coordination may not require an elaborate pricing contract. A constant wholesale price will do.

Copyright/Permission Statement

Originally published in Management Science © 2007 INFORMS

This is a pre-publication version. The final version is available at http://dx.doi.org/10.1287/mnsc.1060.0697

Keywords

distribution channels, fairness, channel coordination, behavioral economics, retailing and wholesaling, pricing

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Date Posted: 15 June 2018

This document has been peer reviewed.