Channel coordination with fairness concerns and consumer rebate

A consumer rebate is a coupon goes from the manufacturer to the consumer. In this paper, we build on the framework introduced by Cui et al. (2007) and investigate the impact of fairness concerns on supply chain coordination when there exists a consumer rebate. We show that the simple wholesale price contract can coordinate a supply chain with rebate when only the retailer is fairness-concerned, and when both the manufacturer and the retailer are fairness-concerned. In addition, we find that the conditions to coordinate the supply chain do not depend on the rebate.