Abstract: Based on the dynamic differential game, the short-sighted and far-sighted behaviors of manufacturers and retailers as well as the cost-sharing behaviors of retailers are considered to study their influences on the behavioral choices of pharmaceutical supply chain members, research and advertising investment operation strategies, and supply chain performance. A differential game model is constructed for four behavior modes: short-sighted manufacturers and retailers (SS), far-sighted manufacturers and short-sighted retailers (FS), short-sighted manufacturers and far-sighted retailers (SF), and far-sighted manufacturers and retailers (FF). The member strategy and performance of four behavior patterns are analyzed and compared. The research shows that: far-sighted behavior is the dominant strategy for both drug manufacturers and drug retailers, and choosing far-sighted behavior, both parties' profit throughout the supply chain will be higher; in addition, the advertising cost sharing behavior of drug retailers can increase the profit of pharmaceutical supply chain members, and cost-sharing ratio in its cooperation with short-sighted manufacturers will be higher.

Key words: short-sight and far-sight, cost sharing, differential game, pharmaceutical supply chain