Price dynamics and quality collaborations: a game theory exploration of cooperative advertising and contract design in manufacturer–retailer supply chains

Alireza Taheri-Moghaddam (), Ata Allah Taleizadeh () and Park Thaichon ()
Additional contact information
Alireza Taheri-Moghaddam: University of Tehran
Ata Allah Taleizadeh: University of Tehran
Park Thaichon: University of Southern Queensland

Journal of Revenue and Pricing Management, 2025, vol. 24, issue 1, No 8, 80-98

Abstract: Abstract This research presents a game theory model for extending a cooperative advertising and contract design (pricing and quality investment) problem in a manufacturer–retailer game. The demand of customers depends on selling price, quality, and advertisement expenditures. The manufacturer invests in national advertising (brand name investment) and the quality of the product, and the manufacturer decides on the wholesale price of the product. The retailer invests in local advertisement and decides about sale price of the product. The problem is analyzed in four different conditions: centralized, decentralized, revenue-sharing (contract design), and market segmentation conditions. The market segmentation condition considers customers’ characteristics into three different types: price-oriented customers, quality-oriented customers, and customers who are not price or quality oriented (individually). The model is solved in all conditions and the results are presented. Sensitivity analysis of key parameters is performed to analyze different situations and the optimal behavior of the supply chain players. Application of the proposed approach for a Middle Eastern country is provided and a real case of the generic medicines market in Iran investigates the performance of the proposed approach.

Keywords: Advertising; Pricing; Quality investment; Contract design; Manufacturer–retailer game; Supply chain management (search for similar items in EconPapers)
Date: 2025
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1057/s41272-024-00517-2 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:jorapm:v:24:y:2025:i:1:d:10.1057_s41272-024-00517-2

Ordering information: This journal article can be ordered from
https://www.palgrave.com/gp/journal/41272

DOI: 10.1057/s41272-024-00517-2

Access Statistics for this article

Journal of Revenue and Pricing Management is currently edited by Ian Yeoman

More articles in Journal of Revenue and Pricing Management from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().