Equilibrium Pricing and Advertising Strategies in a Marketing Channel

S. Jørgensen and Georges Zaccour
Additional contact information
S. Jørgensen: Odense University

Journal of Optimization Theory and Applications, 1999, vol. 102, issue 1, No 8, 125 pages

Abstract: Abstract This paper is concerned with conflict and coordination in a two-member channel of distribution. We propose a differential game model that includes carryover effects of advertising, expressed by a retailer-specific stock of advertising goodwill. Pricing and advertising strategies for both firms are identified under channel conflict as well as coordination. Dynamic advertising policies are designed as stationary Markov perfect strategies. In a symmetric case, these strategies can be determined in closed form, taking into consideration explicitly nonnegativity constraints on advertising rates. We establish a global result for the relationship between the advertising strategies of the two firms under conflict and coordination.

Keywords: Differential games; vertical marketing channels; advertising (search for similar items in EconPapers)
Date: 1999
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (32)

Downloads: (external link)
http://link.springer.com/10.1023/A:1021894529093 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:spr:joptap:v:102:y:1999:i:1:d:10.1023_a:1021894529093

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10957/PS2

DOI: 10.1023/A:1021894529093

Access Statistics for this article

Journal of Optimization Theory and Applications is currently edited by Franco Giannessi and David G. Hull

More articles in Journal of Optimization Theory and Applications from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().