The paper investigates newsvendor problem for a dyadic supply chain in which both the supplier and the retailer are concerned with fairness. Nash bargaining solution is introduced as the fairness reference point and equilibrium results are derived. The effects of fairness concerns on optimal...

The traditional hypothesis of “rationality” is far from perfect. Models of fairness solely based on consequence cannot explain why the same consequence of an action is perceived and reciprocated differently. A reciprocity model which accounts for both consequence and its underlying intention...