Cooperative Advertising and Pricing in a Dynamic Stochastic Supply Chain: Feedback Stackelberg Strategies

被引:176
作者
He, Xiuli [1 ]
Prasad, Ashutosh [2 ]
Sethi, Suresh P. [2 ]
机构
[1] Univ N Carolina, Belk Coll Business, Charlotte, NC 28223 USA
[2] Univ Texas Dallas, Sch Management, Richardson, TX 75080 USA
关键词
Co-op advertising; sales-advertising dynamics; differential games; sethi model; distribution channel; COORDINATION; MODELS; EXPENDITURES; EQUILIBRIA; CONTRACTS; RATES;
D O I
10.1111/j.1937-5956.2009.01006.x
中图分类号
T [工业技术];
学科分类号
08 ;
摘要
Cooperative (co-op) advertising is an important instrument for aligning manufacturer and retailer decisions in supply chains. In this, the manufacturer announces a co-op advertising policy, i.e., a participation rate that specifies the percentage of the retailer's advertising expenditure that it will provide. In addition, it also announces the wholesale price. In response, the retailer chooses its optimal advertising and pricing policies. We model this supply chain problem as a stochastic Stackelberg differential game whose dynamics follows Sethi's stochastic sales-advertising model. We obtain the condition when offering co-op advertising is optimal for the manufacturer. We provide in feedback form the optimal advertising and pricing policies for the manufacturer and the retailer. We contrast the results with the advertising and price decisions of the vertically integrated channel, and suggest a method for coordinating the channel.
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页码:78 / 94
页数:17
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