Abstract: In reality, decision makers are often not fully rational, showing a variety of behavioral preferences. A two-stage closed-loop supply chain with an original manufacturer and a retailer is studied. With the decisions of the original manufacturer and the retailer when they are risk neutral and fairness neutral as references, two different price models under two different situations where the original manufacturer considers retailer′s risk aversion and fairness preference or not are built. The results show that the retailer′s behaviors of risk aversion and fairness preference affect the pricing strategy of original manufacturer and retailer, and the original manufacturer should consider the situation, which is beneficial to the retailer and ensure the original manufacturers don′t get the worst game results when the retailer is risk averse and fairness preferring. Retailer′s risk aversion and fairness preference are always detrimental to the total profit of the supply chain and affect supply chain profit redistribution．That the original manufacturer considers the retailer′s behavior of risk aversion and fairness preference can only eliminate the effects of fairness preference on retailer′s decision, but cannot eliminate the effects of risk aversion.

Key words: risk aversion, fairness preference, differential pricing, Stackelberg game, closed-loop supply chain