Price coordination in distribution channels: A dynamic perspective
Guiomar Martin-Herran and
European Journal of Operational Research, 2015, vol. 240, issue 2, 401-414
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)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:240:y:2015:i:2:p:401-414
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