Dynamic joint decision for a fashion retailer in newsvendor model with nash fairness concerns.
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| Title: | Dynamic joint decision for a fashion retailer in newsvendor model with nash fairness concerns. |
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| Authors: | Chen, Jianxin1 (AUTHOR) chenjianxin403@163.com, Lu, Xuantao1 (AUTHOR), Xiao, Lu1 (AUTHOR), Zhang, Tonghua2 (AUTHOR), Zhou, Yong-wu3 (AUTHOR) |
| Source: | International Journal of General Systems. Feb2026, Vol. 55 Issue 2, p200-234. 35p. |
| Subjects: | Newsvendor model, Fashion merchandising, Stochastic models, Bounded rationality, Group decision making, Ethical decision making, Stability of linear systems |
| Abstract: | The newsvendor model has been extensively applied in the study of fashion products. Given that fashion retailers often need to make joint decisions on pricing and ordering, this paper extends the standard newsvendor model to a dynamic setting with price-dependent stochastic demand. It also incorporates the retailer's fairness-concerned behavioral preferences. Using deterministic demand as a benchmark, we propose three static and dynamic models based on bounded rationality, accounting for both multiplicative and additive demand scenarios. We analyze the equilibrium points of joint decision-making within these models and investigate, both theoretically and numerically, the effects of key parameters–such as decision adjustment speeds and the fairness-concern parameter–on local stability. Numerical simulations are conducted to illustrate chaotic bifurcation diagrams, time series, and the retailer's cumulative expected utility. Our results indicate that as the fairness-concern parameter increases, the retailer's pricing rises while the optimal order quantity decreases. Additionally, faster adjustment speeds in pricing and ordering lead to system instability, resulting in chaotic bifurcation. This highlights the importance of maintaining a moderate adjustment speeds to ensure system stability. Furthermore, we find that multiplicative stochastic demand disturbances exert a greater influence on deterministic demand compared to additive stochastic disturbances. Finally, we offer several managerial implications based on these findings. [ABSTRACT FROM AUTHOR] |
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| Database: | Engineering Source |
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