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Price coordination in distribution channels: A dynamic perspective

Guiomar Martin-Herran and Sihem Taboubi

European Journal of Operational Research, 2015, vol. 240, issue 2, 401-414

Abstract: In this study, we investigate two important questions related to dynamic pricing in distribution channels: (i) Are coordinated pricing decisions efficient in a context where prices have carry-over effects on demand? (ii) Should firms practice a skimming or a penetration strategy if they choose to coordinate or to decentralize their activities? To answer these questions, we consider a differential game that takes place in a bilateral monopoly where the past retail prices paid by consumers contribute to the building of a reference price. The latter is used by consumers as a benchmark to evaluate the value of the product, and by firms to decide whether to adopt a skimming or a penetration strategy.

Keywords: Marketing channels; Dynamic pricing; Channel coordination; Differential games (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1016/j.ejor.2014.07.022

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European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati

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