The Effects of Consumer Rebates in a Competitive Distribution Channel

Salma Karray ()
Additional contact information
Salma Karray: University of Ontario Institute of Technology

A chapter in Games in Management Science, 2020, pp 41-55 from Springer

Abstract: Abstract This research investigates the effectiveness of consumer rebates offered by competing manufacturers in a distribution channel. We consider a two-manufacturer, two-retailer channel and develop a two-period model where consumers’ preferences are distributed along a Hotelling line. The rebate consists in a price discount that can be redeemed on the second period. We solve three Stackelberg games: a benchmark where no rebate is offered, a symmetric game where both manufacturers offer rebates, and an asymmetric game where only one manufacturer provides a rebate. Comparisons of equilibrium solutions show that while manufacturers should not offer rebates, they could do so due to a prisoner dilemma situation when their wholesale prices are high.

Keywords: Rebates; Distribution channels; Competition; Pricing; Game theory (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:isochp:978-3-030-19107-8_3

Ordering information: This item can be ordered from
http://www.springer.com/9783030191078

DOI: 10.1007/978-3-030-19107-8_3

Access Statistics for this chapter

More chapters in International Series in Operations Research & Management Science from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().