Fairness and channel coordination

Tony Haitao Cui, Jagmohan S. Raju, Z. John Zhang

Research output: Contribution to journalArticlepeer-review

591 Scopus citations


We incorporate the concept of fairness in a conventional dyadic channel to investigate how fairness may affect channel coordination. We show that when channel members are concerned about fairness, the manufacturer can use a simple wholesale price above her marginal cost to coordinate this channel both in terms of achieving the maximum channel profit and in terms of attaining the maximum channel utility. Thus, channel coordination may not require an elaborate pricing contract. A constant wholesale price will do.

Original languageEnglish (US)
Pages (from-to)1303-1314
Number of pages12
JournalManagement Science
Issue number8
StatePublished - Aug 2007
Externally publishedYes


  • Behavioral economics
  • Channel coordination
  • Distribution channels
  • Fairness
  • Pricing
  • Retailing and wholesaling


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