This study investigates the most commonly used supply chain coordination tools and evaluates their performance in the context of loss aversion. Using a systematic literature review, 71 articles published between 2005 and 2024 were extracted from the Web of Science database and analyzed. The findings categorize coordination tools into two main types: contractual and non-contractual mechanisms. Among contractual forms, wholesale price contracts were found to be the least effective in mitigating loss aversion effects, while revenue sharing contracts showed the highest efficiency. Buyback and trade credit contracts also demonstrated superior performance over traditional options and wholesale price contracts by better addressing overstocking fears and demand uncertainty. Non-contractual coordination tools, such as centralized inventory systems, backordering, and supplier selection methods, were found to influence ordering behavior by reducing the cognitive impact of loss aversion. The novelty of this study lies in its comprehensive categorization and ranking of coordination tools in relation to behavioral biases, particularly loss aversion rooted in Prospect Theory. It is also the first to systematically identify and evaluate contract performance under such behavioral considerations. The results have significant implications for researchers and practitioners aiming to design more efficient and psychologically informed supply chain systems.
