Retail Competition and Cooperative Advertising
Operations Research Letters, Vol. 39, No. 1, p. 11-16
16 Pages Posted: 18 May 2010 Last revised: 4 Apr 2011
Date Written: May 17, 2010
Abstract
We consider a cooperative advertising channel consisting of a manufacturer selling its product through a retailer in competition with another independent retailer. The manufacturer subsidizes its retailer’s advertising only when a certain threshold is positive. Moreover, the manufacturer’s support for its retailer is higher under competition than in its absence.
Keywords: Differential games, Distribution channels, Cooperative advertising, Retail competition, Subsidy rate, Advertising, Retailing, Stackelberg game, Feedback Stackelberg equilibrium, Nash-Stackelberg differential games
JEL Classification: C61, C7, C73, L13, M3
Suggested Citation: Suggested Citation