Pricing and replenishment strategies in supply chains with competing loss averse retailers

This paper investigates a single-period supply chain model with competing loss-averse retailers who decide their pricing and order quantity simultaneously. Firstly, the unimodality property of the retailer´s expected utility and the uniqueness property of its decisions are studied under non-competing circumstances. In comparison to a risk-neutral retailer, a loss-averse retailer orders less and charges a higher price under some conditions. Then, the competing impact among the loss-averse retailers is considered. After investigating the equilibrium behavior of the decentralized supply chain, a pull contract is constructed to coordinate the decentralized supply chain, which allows the decentralized chain to perform as well as a centralized one.