Abstract for:Application of inequity aversion models in a dynamically complex supply chain
The purpose of this paper is to develop system dynamics models of inequity aversion and apply them to a dynamically complex supply chain. Based on the differences between the conceptualizations of individual models and differences between subsequent simulation results, we discuss implications of inequity aversion for decision-makers in supply chains. We find that, if supply chain members have social preferences, such as fairness concerns, they will experience a reduction in their utilities. Depending on their reference point, this reduction of utility could potentially explain different evaluation of performance by different economic actors and their willingness to make risky decisions.