Buyback Contract and Coordination in Supply Chain with Single Supplier and Multiple Loss-averse Retailers

In order to maximize the operation performance of supply chain, a research is conducted on a risk neutral supplier and multiple retailers based on prospect theory, and a buyback contract model considering retailers' risk aversion ratio is discussed. It is found that there is a unique Nash equilibrium total order quantity to maximize the expected utility of multiple competing lossaverse retailers and that when the degree of risk aversion of retailers is higher or lower,a unique of buyback price is proved to maximize the operation performance, and achieving the coordination of whole supply chain.