Abstract: In order to study the effort input of quality upgrade and pricing in the secondary supply chain composed of suppliers and manufacturers with behavioral preferences, a model was established based on mean-variance method and FS fairness theory. Using the method of Stackelberg game, the impact of the quality level of the final products and parts, the quality upgrade level of the parts and manufacturer's behavior preference on the decision-making and utility of both sides of the supply chain was analyzed, and verified by numerical simulation. The study found that while the utility of both sides of the supply chain, the price of parts, the efforts to upgrade the quality of parts, and the order quantity are positively correlated with the level of quality upgrade of parts, they are affected by the level of quality upgrade of parts and show different trends from the quality of final products. Furthermore, the price of parts is affected by the market environment and the quality of parts shows different trends. The utility of both sides of the supply chain, the efforts to upgrade the quality of parts, and the order quantity are negatively related to the quality of parts. The order quantity, the efforts to upgrade the quality of parts, and the price of parts are positively related to the manufacturer's risk aversion, and negatively related to the manufacturer's fairness preference.

Key words: quality upgrade, fairness preference, risk aversion, price