Protecting labor rights: Contract design and coordination between brand firms and suppliers

Yanju Zhou, Hongzhen Lai, Xiaohong Chen, Chunhua Hu

Abstract: Highlights•Design a contract to coordinate participation in labor rights protection.•The role of a unilateral cost-sharing contract and its two extended contracts.•The impact of consumer heterogeneity and reference effects on protecting labor rights.•Reference price in centralized model may higher than unilateral cost-sharing model.•Overreliance on brands to evaluate total efforts to protect labor rights is harmful.