Supply Chain Risk Infection Effect Analysis Considering Fairness Preference

The economic globalization brought to enterprises in the global market and global resources, but also caused the problems such as more competition participants, market demand more changeable, supply chain extended, enterprise management and coordination more difficulty, which increased the competitive pressure. In order to cope with the increasingly fierce competitive environment effectively, stand out in the world economic globalization and maintain sustained competitiveness, supply chain integration began to accepted by more an more enterprises; The development and mature of communication, the internet and transportation provided technical support for the integration of supply chain operation. By the above two points, supply chain gradually replace the single enterprise to participate in the modern market competition. Due to the structural features of supply chain, risk would transfer downstream an upstream along the chain by the means of link between node enterprises, producing mountain phenomenon such bullwhip effect, even lead to supply chain eventually rupture, causing huge losses. Therefore, study to find the law of risk infection is of great importance to risk management. Existing supply chain risk infection research mainly based on policy maker purely rational assumption, however, in recent years, behavior and experimental economics proved the existence of the fairness preference, which making policy makers do not make profit maximization as the goal, as the assumption of pure reason did. Represented by fairness preference, the social preference can be more close to the practice of business decision-making. Based on this point of view, the study of supply chain risk infection would of more theoretical and practical value.Based on literature review of supply chain risk infection and fairness preference, this paper selected a two echelon supply chain composed of single manufacture and single retailer as object. In order to study the relationship between the intensity of fairness preference and the price and profit of manufacture and retailer under the condition of either manufacture or retailer with fairness preference in the supply chain dominated by either manufacture or retailer, supply chain risk infection theory, fairness preference theory, Stackelberg game model and elastic coefficient was employed to established the mathematical model. Combined with Qualitative analysis and comparative method, finally the research found: the trend of price risk was not affected by fairness preference, the intensity of price risk was decreasing down along the supply chain; the node enterprises had equal profit risk, and the risk was not affect by fairness preference, only affected by market demand; fairness preference would affect price risk and intensity of price risk, impact due to the type of supply chain and the type of enterprise which owned fairness preference, presented a certain regularity.