How Do Fairness Concern and Power Structure Affect Competition Between E-Platforms and Third-Party Sellers?

Chi ZHOU, Xinyu LI, Yufei REN, Jing YU*

*Corresponding author for this work

Research output: Journal PublicationsJournal Article (refereed)peer-review

9 Citations (Scopus)

Abstract

Fairness issues have been frequently mentioned in the business world. In the context of today's global e-platform economy, this is more likely to breed fairness concerns due to the inherent power differential between e-platforms and third-party sellers (3P sellers). This article focuses on the impact of fairness concerns and power structures on the performance of supply chain members. In this article, we develop a game-theoretic model consisting of e-platform and 3P seller. The results of this article show that different power structures have different influences on the existence of fairness concerns. When the power structure tends to be balanced, the emergence of fairness concerns reduces the total efficiency of the supply chain system. When the e-platform is in a strong position, the emergence of fairness concerns has no effect on the supply chain system. It is also found that although the fairness concerns of the 3P seller cannot positively affect the supply chain as a whole, for the 3P seller itself, the emergence of fairness concerns can realize the transfer of profit distribution from the e-platform to the 3P seller by resetting the commission. In addition to the contribution of the theoretical part, some management insights are gained in this article. Supply chain members need to pay attention to the relationship management among supply chain members (e.g., fairness concern psychology). From the perspective of resource allocation, fairness and efficiency sometimes cannot coexist, and the stability of the supply chain and overall high efficiency sometimes cannot coexist.

Original languageEnglish
Pages (from-to)7479-7495
Number of pages17
JournalIEEE Transactions on Engineering Management
Volume71
Early online date12 Apr 2023
DOIs
Publication statusPublished - 2024
Externally publishedYes

Bibliographical note

Publisher Copyright:
© 1988-2012 IEEE.

Keywords

  • Competition
  • fairness concern
  • game theory
  • online retailing
  • power structure

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