Abstract:Considering the fairness concern of recyclers and the innovation investment of manufacturers, the closed-loop supply chain decision-making models of fairness concern and innovation investment are constructed respectively, and the suppliers’ forward integration contract based on cost sharing is designed for the disadvantage and unfairness of recycler. The influences of fairness concern, innovation success rate and cost sharing ratio on supply chain decision-making are discussed. The results show that the recyclers’ concern for fairness is a means of profit distribution within the recycling system, and it is also an act of “harming others for one’s own benefit”. The improvement of the success rate of innovation is conducive to the profit growth of the supply chain system, but the “free-riding” behavior of suppliers is not conducive to the innovation of manufacturer and the long-term stability of the supply chain. When the degree of fairness concern and the proportion of cost sharing meet certain conditions, the forward integration contract of suppliers based on cost sharing can not only avoid the “harming others for one’s own benefit” behavior of the recyclers, but also restrain the suppliers’ opportunistic “free-riding”behavior, and further optimize the decision-making model to achieve Pareto improvement of supply chain.