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Related Experiment Video

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Using Visual and Narrative Methods to Achieve Fair Process in Clinical Care
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Multistage Supply Chain Channel Principal-Agent Model in the Context of e-Commerce With Fairness Preference.

Xin Liu1, Zhen Xu2, Qingxia Zhang1

  • 1Graduate School of Information, Applied Statistics, Southwest Petroleum University, Chengdu, China.

Evaluation Review
|January 23, 2024
PubMed
Summary

The fair preference model enhances e-commerce supply chains by increasing retailer effort and profits. This model leads to better outcomes for both manufacturers and retailers compared to traditional channels.

Keywords:
complete rationalitye-commerce efficiency coefficientfairness preferenceprincipal-agentsupply chain channel

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Area of Science:

  • Supply Chain Management
  • E-commerce Logistics
  • Behavioral Economics

Background:

  • Information asymmetry is a key challenge in e-commerce supply chains.
  • Traditional principal-agent models often assume complete rationality, which may not reflect real-world scenarios.

Purpose of the Study:

  • To investigate information asymmetry in e-commerce supply chains.
  • To analyze the impact of a fair preference model on channel member behavior and returns.
  • To develop a more realistic principal-agent model for e-commerce supply chains.

Main Methods:

  • Developed a principal-agent model incorporating a fair preference model.
  • Contrasted the fair preference model with a completely rational model.
  • Analyzed the correlations between efficiency coefficients, effort levels, and profits.

Main Results:

  • Retailer effort and manufacturer incentives are positively correlated with e-commerce efficiency.
  • Higher fixed income from manufacturers increases retailer effort.
  • When e-commerce efficiency exceeds 1, retailers outperform traditional channels.

Conclusions:

  • The fair preference model leads to Pareto improvements for both manufacturers and retailers.
  • Increased retailer effort and revenue are observed under the fair preference model.
  • The model offers a more realistic approach to understanding e-commerce supply chain dynamics.