Who Should Donate? A Socially Responsible Supply Chain With Prosocial Customers

ABSTRACT Charitable donations have been widely practiced by upstream manufacturers and downstream sellers involved in the supply chain to exercise corporate social responsibility. In addition to generating social benefits (i.e., donation value), donations can also contribute to building a brand's reputation and expanding the customer base, as today's consumers are increasingly socially responsible. This study addresses the question of whether a firm should engage in direct donations or opt for a “free ride” by leveraging supply chain partner's donation initiatives to improve operational performance. We consider a socially responsible supply chain consisting of a manufacturer and a product seller, who seek to maximize his/her mixed objective, that is, a weighted sum of their respective profit and donation value. Both firms consider donation as a means of managing demand, which depends on the total amount donated by the supply chain members. Following a Stackelberg game setting, we study the interactive donation and inventory decisions involved in the supply chain. To encourage both firms to participate in donation and enhance their overall performance, we then investigate several collaborative donation strategies. We show that under equilibrium, only one firm donates and the other simply takes a free ride without donating anything. Furthermore, a firm could offer monetary incentives to its supply chain partner in the form of price discounts or refunds, contingent upon the partner making charitable donations. Such a collaborative donation approach can always benefit the firm offering the monetary incentives, while paradoxically it may harm its supply chain partner (who receives the discounts or refunds).

Authors

Institutions

Publication Details

Journal
Naval Research Logistics (NRL)
Published
2025-10-17
DOI
https://doi.org/10.1002/nav.70026
Primary Topic
Innovation and Socioeconomic Development
Type
article
Field-Weighted Citation Impact
0.00
Controls
|||
ALL TIME
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
article

Who Should Donate? A Socially Responsible Supply Chain With Prosocial Customers

Xiuyi Zhang, Yongbo Xiao, Xinyue Cai, Fei Gao
Naval Research Logistics (NRL)
Innovation and Socioeconomic Development
article

Who Should Donate? A Socially Responsible Supply Chain With Prosocial Customers

Xiuyi Zhang, Yongbo Xiao, Xinyue Cai, Fei Gao
article en

Abstract

ABSTRACT Charitable donations have been widely practiced by upstream manufacturers and downstream sellers involved in the supply chain to exercise corporate social responsibility. In addition to generating social benefits (i.e., donation value), donations can also contribute to building a brand's reputation and expanding the customer base, as today's consumers are increasingly socially responsible. This study addresses the question of whether a firm should engage in direct donations or opt for a “free ride” by leveraging supply chain partner's donation initiatives to improve operational performance. We consider a socially responsible supply chain consisting of a manufacturer and a product seller, who seek to maximize his/her mixed objective, that is, a weighted sum of their respective profit and donation value. Both firms consider donation as a means of managing demand, which depends on the total amount donated by the supply chain members. Following a Stackelberg game setting, we study the interactive donation and inventory decisions involved in the supply chain. To encourage both firms to participate in donation and enhance their overall performance, we then investigate several collaborative donation strategies. We show that under equilibrium, only one firm donates and the other simply takes a free ride without donating anything. Furthermore, a firm could offer monetary incentives to its supply chain partner in the form of price discounts or refunds, contingent upon the partner making charitable donations. Such a collaborative donation approach can always benefit the firm offering the monetary incentives, while paradoxically it may harm its supply chain partner (who receives the discounts or refunds).

Naval Research Logistics (NRL)
Indiana University Bloomington (US), Renmin University of China (CN), Tsinghua University (CN)
Openalex Percentile: Top 45%
Innovation and Socioeconomic Development
AI Navigator

Ask Laika to Summarize, Analyze, and Connect papers live on the map.

Summarize Papers & Methodologies

Extract key findings, datasets, and comparative methods across publications.

Benchmark Rankings & Visual Analytics

Rank top research institutions, authors, funders, topics, and journals by Field-Weighted Citation Impact (FWCI) and paper volume with instant charts.

Connect Distant Disciplines

Bridge topological clusters on the map to find hidden collaborative intersections.