A Differential Game of a Dual Distribution Channel

27 Pages Posted: 18 Sep 2009

See all articles by Olivier Rubel

Olivier Rubel

University of California, Davis

Georges Zaccour

HEC Montreal - Department of Decision Sciences

Date Written: September 16, 2009

Abstract

An infinite-horizon differential game between a manufacturer and a retailer is considered. The players control their marketing efforts and the sales share of the online channel is the state of the system. The manufacturer seeks to maximize her profit made on both the indirect and direct channels and faces, aside from her marketing effort, a logistics cost of selling online. The retailer seeks to keep consumers buying offline through her effort. A feedback Nash equilibrium is identified and results are discussed.

Keywords: Differential Game, Dual Distribution Channel, Electronic Commerce

Suggested Citation

Rubel, Olivier and Zaccour, Georges, A Differential Game of a Dual Distribution Channel (September 16, 2009). Available at SSRN: https://ssrn.com/abstract=1474413 or http://dx.doi.org/10.2139/ssrn.1474413

Olivier Rubel (Contact Author)

University of California, Davis ( email )

One Shields Avenue
Davis, CA 95616
United States

Georges Zaccour

HEC Montreal - Department of Decision Sciences ( email )

HEC Montreal
3000, Chemin de la Côte-Sainte-Catherine
Montreal, Quebec H2X 2L3 H3T 2A7
Canada

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