Buyback Contract Analysis Of Supply Chain With Single Supplier And Multiple Loss-averse Retailers

Supply chain management as an advanced management mode, the core is to achieve the coordination of supply chain logistics, information flow and capital flow, buyback contract of supply chain management is a key technology to realize supply chain coordination. The mainstream of buyback contract of supply chain coordination mechanism is established in the new classical economics "rational economic man" assumption, which assumes that the individual decision is rational,and there are irrational and limited rational decision-making behavior. The research of behavioral finance points out that people are not always rational in decision making.Studying the irrational decision behavior is helpful to understand the actual decision behavior of enterprises in the supply chain.Based on the prospect theory analysis paradigm of Kahneman and Tversky, some decision makers are loss aversion, loss averse decision makers face the same number of losses and gains, they are more sensitive to losses. The paper chooses a risk neutral supplier and multiple loss averse retailers as the research object, based on prospect theory definition of loss aversion, introduces loss averse retailer factor, constructs supply chain buyback contract model. Based on model analysis, the retailer’s optimal ordering quantity and retailers number is proportional, retailers and the degree of loss aversion is inversely proportional. At the same time, it decressed with the supplier to provide wholesale prices increased, and increased with the increase of the buyback price; a number of competition system loss averse retailer exist unique Nash equilibrium of the total order quantity which maximizes the expected utility; the loss averse retailer works on buy back contract through the buyback price, it can achieve supply chaincoordinate.