Research On Green Supply Chain Pricing Decision And Coordination Based On Retailer's Overconfidence

In recent years,the tightening of resources,environmental pollution,increasingly strict government laws and regulations,and increased demand for green products of consumers have made the implementation of green supply chain management an inevitable trend.In reality,in order to improve their core competitiveness and enhance their environmental image,more and more companies have begun to implement green supply chain management,such as some international leading companies Apple,Sony,etc.,the well-known multinational companies Ford,General Electric and so on.More and more scholars have begun to pay attention to the research of green supply chain management,green supply chain pricing and operational decision-making have become the research hot issues in recent years.By reading the status of decision-making research on green supply chain in domestic and foreign literature,the author found that previous research often assumed that the decision maker in the green supply chain was completely rational,but in reality,facing the uncertain market environment or affected by its past experience,the supply chain decision maker was often irrational when making decisions.The decision made under this irrational behavior deviated from the decision result under complete rationality.Overconfidence as an irrational factor has been widely studied in psychology and behavioral economics.A lot of research confirmed that overconfidence had an impact on managers' decision-making outcomes.In the study of green supply chain,few scholars considered the influence of this irrational factor on green supply chain decision-making and coordination.Therefore,this paper studies green supply chain pricing decisions and corresponding coordination measures based on retailers' overconfidence behavior preferences,considering the impact of retailers' overconfidence of the demand or overconfidence of retail' sales efforts on the green supply chain system.First of all,research on the status of green supply chain management,overconfidence decision-making issues,green innovation concept,overconfidenceconcept,supply chain contract,etc.Secondly,based on the newsboy model,study the decision of the green supply chain wholesale price under the uncertainty of market demand,and use this as a benchmark model,introduce the retailer who is overconfident of the uncertain market demand,the retailer who is completely rational.Comparing difference of manufacturer's decision,retailer's decision,and their expected profits under the two cases;Then considering that when the market demand is affected by retailer's sales efforts,still based on the green supply chain decision model under the retailer's full rationality,study the impact of green supply chain pricing decisions under the retailer who is overconfident in its sales efforts.Finally,relying on the supply chain contract theory to design contracts to coordinate the green supply chain of overconfident retailers,design three kinds of contract coordination,and compare the three contracts.This study draws the following main conclusions:(1)In the case that the market demand is only related to the retail price of the product and the greenness of the product,the retailer's overconfidence to the random demand can improve the greenness of the product,increase the wholesale price of the product,and also generate order deviations,the retailer's randomness excessive self-confidence under demand is always conducive to the improvement of manufacturers' profits,but it also leads to the decline of their own profits,and for manufacturers,the judgment bias of retailers can bring more benefits to yourself.Therefore,in reality,this kind of overconfidence has advantages and disadvantages.(2)When market demand depends on retailer' sales efforts,the retailer overestimate its own efforts,which will benefit the greenness of products and the increase of its own sales efforts.The expected profits of manufacturer and retailer will increase when the retailer' overconfidence coefficient increases,but it is the retailer's overconfidence in its own sales efforts that leads to deviations between expected market demand and real market demand,and this deviations will grow bigger and bigger as the increasing of the retailer' overconfidence.(3)Relying on the supply chain contract theory,design contracts that coordinate the green supply chain under the overconfidence of retail' sales efforts.It is found that under the two pricing contracts,the greenness and retail price of the products are equal to the results under the decentralized decision-making,so it is impossible tocoordinate overconfidence green supply chain.Under the cost-sharing contract coordination,although the greenness of the product can be improved,it will also stimulate the retailer to increase the retail price of the product,so it cannot effectively coordinate the retailer's overconfident green supply chain.Based on the revenue-sharing supply chain contract,consumers can purchase green products with low price and high greenness,and the manufacturer and the retailer can also obtain higher expected profits.