Pricing Decision for a Supply Chain with Social-responsibility Concerned Retailer

This paper analyses the pricing decision of a single-manufacturer-single-retailer supply chain, where the retailer exhibits corporate social responsibility(CSR). One centralized and two decentralized game models(manufacturer-Stackelberg game and retailer-Stackelberg game) are built to examine the impact of undertaking(CSR) on the profitability of the supply chain members as well as the whole channel. It is found that no matter who dominates the channel, the retailer always suffers from CSR when it is a profit-maximizer. Our finding verifies that not only manufacturers but also the retailer would be not willing to take(CSR) unless governments' subsidies or market rewards can compensate them for doing so. Interestingly when social responsibility is concerned, we show that a dominate retailer will be best off by taking(CSR). Therefore, we suggest that a powerful retailer should offer to take(CSR) strategically and otherwise for a weak one.