<p>Social preferences for altruism and fairness are widely recognized factors in operations management. In this paper, we establish a two-echelon supply chain comprising an innovative supplier who is rational and a leading manufacturer with social preferences. We establish a game-theoretical model to examine the manufacturer’s optimal preferences, pricing strategies, and innovation levels under the wholesale price contract (WPC) and the cost-sharing contract (CSC). We find that when the manufacturer’s fairness preferences manifest as disadvantageous inequality, different levels of innovation effectiveness incline the manufacturer to different social preferences under the WPC, and fairness is consistently shown under the CSC. However, when the manufacturer’s fairness preferences involve advantageous inequality, although the innovation level increases due to social preferences, the manufacturer should remain fully rational regardless of which contract is implemented. Moreover, as the manufacturer’s altruism increases, we observe a decrease in the cost-sharing rate, indicating a greater unwillingness to bear a higher proportion of innovation costs. This is because altruism is reflected in a higher wholesale price. Surprisingly, the CSC combined with altruism neither incentivizes innovation nor increases profit for the whole channel. The CSC does not always outperform the WPC in terms of profits and innovation. Besides, we extend the analysis to incorporate the supplier’s fairness preferences, and find that such preferences not only discourage the supply chain innovation but also harm the interests of all parties involved. Our findings contribute valuable insights into the role of altruism and fairness in operations management on innovation and pricing strategies.</p>