Brand difference-induced vs. channel competition-induced fairness: strategic implications for e-commerce platforms and manufacturers

The intricacies of relationships between e-commerce platforms and manufacturers have deepened with the e-commerce economy's rapid evolution, highlighting the significance of fairness concerns from the perspective of decision-makers within these entities. We delve into how these concerns influence the strategic equilibrium of both stakeholders, focusing on two distinct fairness concern drivers: brand differences and channel competition. Through a game-theoretic lens, our analysis reveals that general fairness concerns tend to diminish profitability for both e-platforms and manufacturers, necessitating a delicate balance between fairness and profit maximization. The source of fairness concerns plays a pivotal role in shaping pricing strategies and profitability outcomes. However, there exist situations where one party's fairness concerns could raise the profits for the other party, adding a layer of complexity to these dynamics. Additionally, the strategies surrounding product offerings by manufacturers are intricately linked to the service levels provided by e-commerce platforms, suggesting a strategic interplay that warrants careful consideration by platform operators to sustain equitable supply chain partnerships.