Abstract: Group-buying strategy is widely used in the procurement model of the enterprise, which is beneficial for enterprises to improve bargaine power, reduce purchase cost and so on. Most of the existing studies have assumed that supply chain members are completely rational, ignoring that decision makers are often pursuing fairness. A two-level supply chain consisting of one supplier and two competing retailers is studied by considering the decision maker’s behavioral characteristics—fair concerns and quantity discount contracts into the traditional model. On this basis, the decision-making model of two competing retailers ordering from the same supplier is established. Under the premise of supplier fairness neutrality and retailer performance fairness,the retailers’ optimal strategies and maximum utilities are obtained by using the optimization theory. In the case of the symmetry of the two retailers, the influence of the retailers’ optimal ordering strategy selection, fair concern parameters, quantity discount ratio, competition intensity and bargaining power on the optimal order quantities are theoretically analyzed. The results show that the competition intensity and quantity discount ratio are positively correlated with the optimal order quantities of the retailers. The influence of bargaining power and fairness concern parameters on the retailer’s order quantity are related to the quantity discount ratio. Finally, numerical examples are conducted to analyze the heterogeneous and nonlinear quantity discount ratios of two retailers and the joint purchase by multiple retailers. Our numerical results are consistent with the theoretical analysis obtained in the paper.

Key words: two-level supply chain; grouping-buying; competition; fairness concern; quantity discount contract