IDEAS home Printed from https://ideas.repec.org/a/eee/transe/v164y2022ics1366554522001685.html
   My bibliography  Save this article

Strategic role of charitable donation in supply chain coordination with consumer prosocial preference

Author

Listed:
  • Huang, Guoxuan
  • Zheng, Benrong
  • Zou, Bipan
  • Cheng, T.C.E.

Abstract

Enterprises commonly make charitable donations to attract customers to purchase their products. We explore the supply chain coordination problem with charitable donation via a Stackelberg game, wherein the e-commerce platform is the leader and the manufacturer is the follower. The former sells the products and decides the commission, whereas the latter determines the charitable donation investment and price. We investigate the charitable donation and pricing strategies in a centralized and decentralized system, and obtain the following insights. (1) The donation and pricing strategies hinges on the proportion of prosocial customers and the donation cost coefficient. (2) Donation can increase the product price and the supply chain performance, unlike non-donation. (3) In the decentralized system with extremely profitable market conditions, charitable donation will aggravate the competition in the supply chain, which benefits the e-commerce platform but hurts the manufacturer. Nonetheless, under certain conditions, the coordination of supply chain can be automatically realized. (4) A simple two-part tariff contract can perfectly coordinate the supply chain.

Suggested Citation

  • Huang, Guoxuan & Zheng, Benrong & Zou, Bipan & Cheng, T.C.E., 2022. "Strategic role of charitable donation in supply chain coordination with consumer prosocial preference," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 164(C).
    • Handle: RePEc:eee:transe:v:164:y:2022:i:c:s1366554522001685
    DOI: 10.1016/j.tre.2022.102777
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1366554522001685
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tre.2022.102777?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Panda, S. & Modak, N.M. & Basu, M. & Goyal, S.K., 2015. "Channel coordination and profit distribution in a social responsible three-layer supply chain," International Journal of Production Economics, Elsevier, vol. 168(C), pages 224-233.
    2. Panda, Shibaji, 2014. "Coordination of a socially responsible supply chain using revenue sharing contract," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 67(C), pages 92-104.
    3. Paolo Letizia & George Hendrikse, 2016. "Supply Chain Structure Incentives for Corporate Social Responsibility: An Incomplete Contracting Analysis," Production and Operations Management, Production and Operations Management Society, vol. 25(11), pages 1919-1941, November.
    4. Leon Yang Chu & Guang Li & Paat Rusmevichientong, 2018. "Optimal Pricing and Inventory Planning with Charitable Donations," Manufacturing & Service Operations Management, INFORMS, vol. 20(4), pages 687-703, October.
    5. Xin Li & Minghui Xu & Dongsheng Yang, 2021. "Cause-Related Product Pricing with Regular Product Reference," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 38(04), pages 1-21, August.
    6. Bian, Junsong & Li, Kevin W. & Guo, Xiaolei, 2016. "A strategic analysis of incorporating CSR into managerial incentive design," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 86(C), pages 83-93.
    7. Soeun Park & Woonghee Tim Huh & Byung Cho Kim, 2021. "Optimal inventory management with buy-one-give-one promotion," IISE Transactions, Taylor & Francis Journals, vol. 54(2), pages 198-209, November.
    8. Anil Arya & Brian Mittendorf, 2015. "Supply Chain Consequences of Subsidies for Corporate Social Responsibility," Production and Operations Management, Production and Operations Management Society, vol. 24(8), pages 1346-1357, August.
    9. Aradhna Krishna & Uday Rajan, 2009. "Cause Marketing: Spillover Effects of Cause-Related Products in a Product Portfolio," Management Science, INFORMS, vol. 55(9), pages 1469-1485, September.
    10. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-1458, December.
    11. Rui Albuquerque & Yrjö Koskinen & Chendi Zhang, 2019. "Corporate Social Responsibility and Firm Risk: Theory and Empirical Evidence," Management Science, INFORMS, vol. 65(10), pages 4451-4469, October.
    12. Ma, Peng & Shang, Jennifer & Wang, Haiyan, 2017. "Enhancing corporate social responsibility: Contract design under information asymmetry," Omega, Elsevier, vol. 67(C), pages 19-30.
    13. Shi, Xiutian & Chan, Hau-Ling & Dong, Ciwei, 2020. "Impacts of competition between buying firms on corporate social responsibility efforts: Does competition do more harm than good?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 140(C).
    14. Tim Kraft & León Valdés & Yanchong Zheng, 2020. "Motivating Supplier Social Responsibility Under Incomplete Visibility," Manufacturing & Service Operations Management, INFORMS, vol. 22(6), pages 1268-1286, November.
    15. Guo Li & Na Li & Suresh P. Sethi, 2021. "Does CSR Reduce Idiosyncratic Risk? Roles of Operational Efficiency and AI Innovation," Production and Operations Management, Production and Operations Management Society, vol. 30(7), pages 2027-2045, July.
    16. Fan, Di & Lo, Chris K.Y. & Zhou, Yi, 2021. "Sustainability risk in supply bases: The role of complexity and coupling," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 145(C).
    17. Hsueh, Che-Fu & Chang, Mei-Shiang, 2008. "Equilibrium analysis and corporate social responsibility for supply chain integration," European Journal of Operational Research, Elsevier, vol. 190(1), pages 116-129, October.
    18. Wang, Zizhuo & Wang, Mingzheng & Liu, Weiwei, 2020. "To introduce competition or not to introduce competition: An analysis of corporate social responsibility investment collaboration in a two-echelon supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 133(C).
    19. Liyin Jin & Yanqun He, 2018. "How the frequency and amount of corporate donations affect consumer perception and behavioral responses," Journal of the Academy of Marketing Science, Springer, vol. 46(6), pages 1072-1088, November.
    20. Tim Kraft & León Valdés & Yanchong Zheng, 2018. "Supply Chain Visibility and Social Responsibility: Investigating Consumers’ Behaviors and Motives," Manufacturing & Service Operations Management, INFORMS, vol. 20(4), pages 617-636, October.
    21. Cai, Ya-Jun & Choi, Tsan-Ming & Zhang, Ting, 2022. "Commercial used apparel collection operations in retail supply chains," European Journal of Operational Research, Elsevier, vol. 298(1), pages 169-181.
    22. Raza, Syed Asif, 2018. "Supply chain coordination under a revenue-sharing contract with corporate social responsibility and partial demand information," International Journal of Production Economics, Elsevier, vol. 205(C), pages 1-14.
    23. Jasjit Singh & Nina Teng & Serguei Netessine, 2019. "Philanthropic Campaigns and Customer Behavior: Field Experiments on an Online Taxi Booking Platform," Management Science, INFORMS, vol. 65(2), pages 913-932, February.
    24. Fei Gao, 2020. "Cause Marketing: Product Pricing, Design, and Distribution," Manufacturing & Service Operations Management, INFORMS, vol. 22(4), pages 775-791, July.
    25. Madill, Judith & O'Reilly, Norm, 2010. "Investigating social marketing sponsorships: Terminology, stakeholders, and objectives," Journal of Business Research, Elsevier, vol. 63(2), pages 133-139, February.
    26. Neeraj Arora & Ty Henderson, 2007. "Embedded Premium Promotion: Why It Works and How to Make It More Effective," Marketing Science, INFORMS, vol. 26(4), pages 514-531, 07-08.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Guo, Xiongfei & Chen, Jing & Wu, Jie & Zhang, Tinglong & Zhang, Hui, 2024. "Returns policy, in-store service, and contract strategies in the presence of customer returns," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 186(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kumar, Patanjal & Baraiya, Rajendra & Das, Debashree & Jakhar, Suresh Kumar & Xu, Lei & Mangla, Sachin Kumar, 2021. "Social responsibility and cost-learning in dyadic supply chain coordination," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 156(C).
    2. Ye, Yi & Guo, Qiang & Nie, Jiajia, 2023. "Retailer information strategies with a dual-purpose manufacturer," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 180(C).
    3. Fei Gao, 2020. "Cause Marketing: Product Pricing, Design, and Distribution," Manufacturing & Service Operations Management, INFORMS, vol. 22(4), pages 775-791, July.
    4. Benrong Zheng & Liang Jin & Guoxuan Huang & Jie Chu, 2023. "Retailer’s optimal CSR investment in closed-loop supply chains: the impacts of supply chain structure and channel power structure," 4OR, Springer, vol. 21(2), pages 301-327, June.
    5. Qian Wang & Yongguang Zhong & Guangye Xu, 2019. "Optimal Decisions and Coordination in a Socially Responsible Supply Chain with Irresponsibility Risk," Sustainability, MDPI, vol. 11(24), pages 1-16, December.
    6. Wang, Ningning & Xing, Wei & Zhao, Xuan, 2022. "Strategic inventory in the presence of socially responsible dual distribution channels," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 159(C).
    7. Ningning Wang & Zhuoxin Li, 2021. "Supplier Encroachment with a Dual‐Purpose Retailer," Production and Operations Management, Production and Operations Management Society, vol. 30(8), pages 2672-2688, August.
    8. Liping Song & Yingluo Yan & Fengmin Yao, 2020. "Closed-Loop Supply Chain Models Considering Government Subsidy and Corporate Social Responsibility Investment," Sustainability, MDPI, vol. 12(5), pages 1-27, March.
    9. Yong Liu & Qian Xu & Zhi‐yang Liu, 2020. "A coordination mechanism through value‐added profit distribution in a supply chain considering corporate social responsibility," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(4), pages 586-598, June.
    10. Junjian Wu & Henry Xu, 2021. "Information Leakage and Financing Decisions in a Supply Chain with Corporate Social Responsibility and Supply Uncertainty," Sustainability, MDPI, vol. 13(21), pages 1-22, October.
    11. Qi Zhang & Yong Liu & Zhiyang Liu, 2022. "Decision Analysis of Manufacturer-Led Closed-Loop Supply Chain Considering Corporate Social Responsibility," IJERPH, MDPI, vol. 19(22), pages 1-23, November.
    12. Peng Ma & Yeming Gong & Mingzhou Jin, 2019. "Quality efforts in medical supply chains considering patient benefits," Post-Print hal-02312386, HAL.
    13. Hosseini-Motlagh, Seyyed-Mahdi & Govindan, Kannan & Nematollahi, Mohammadreza & Jokar, Abbas, 2019. "An adjustable bi-level wholesale price contract for coordinating a supply chain under scenario-based stochastic demand," International Journal of Production Economics, Elsevier, vol. 214(C), pages 175-195.
    14. Xia Zhao & Runsheng Yin, 2018. "Coordination of a socially responsible two-stage supply chain under price-dependent random demand," 4OR, Springer, vol. 16(4), pages 379-400, December.
    15. Liu, Weihua & Wei, Wanying & Choi, Tsan-Ming & Yan, Xiaoyu, 2022. "Impacts of leadership on corporate social responsibility management in multi-tier supply chains," European Journal of Operational Research, Elsevier, vol. 299(2), pages 483-496.
    16. Weihua Liu & Wanying Wei & Xiaoyu Yan & Di Wang, 2019. "Supply Contract Design with Asymmetric Corporate Social Responsibility Cost Information in Service Supply Chain," Sustainability, MDPI, vol. 11(5), pages 1-24, March.
    17. Ma, Peng & Gong, Yeming & Jin, Mingzhou, 2019. "Quality efforts in medical supply chains considering patient benefits," European Journal of Operational Research, Elsevier, vol. 279(3), pages 795-807.
    18. Fei Gao & Gilvan C. Souza, 2022. "Carbon Offsetting with Eco-Conscious Consumers," Management Science, INFORMS, vol. 68(11), pages 7879-7897, November.
    19. Huijin Cheng & Hao Ding, 2020. "Incentive Decision for Supply Chain with Corporate Social Responsibility and Lag Effect," Sustainability, MDPI, vol. 12(7), pages 1-19, March.
    20. Cui-Hua Zhang & Peng Xing & Jin Li, 2018. "Optimal Strategy of Social Responsibility and Quality Effort in Service Supply Chain with Quality Preference," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 35(03), pages 1-43, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transe:v:164:y:2022:i:c:s1366554522001685. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600244/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.