In this paper, 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 its marginal cost to...

The authors analytically and experimentally evaluate how firms make decisions in a two-stage dyadic channel, in which firms decide on investments in the first stage and then on prices in the second stage. They find that firms' behavior differs significantly from the predictions of the standard...

Power, a fundamental characteristic of social interactions, characterizes one's ability to influence others. Fairness, inherently a type of social preference, impacts distributive decision-making. How does power shape the perceptions of fairness in economic interactions? While previous research...

Firms enjoy declining cost per unit of output with increasing cumulative output in a variety of industries, which gives rise to consumer concerns about transaction fairness. Consumers are less likely to purchase from a firm if it continues to reap an unfairly high profit margin. Intuitively,...