Coordination of Advertising Strategies in a Fashion Licensing Contract

Alessandra Buratto () and Georges Zaccour

Journal of Optimization Theory and Applications, 2009, vol. 142, issue 1, No 2, 53 pages

Abstract: Abstract The aim of this paper is to characterize cooperative and noncooperative advertising strategies of a licensor and licensee involved in a licensing contract in the fashion business. Licensing is the process of leasing a legally protected entity (brand, name, logo, etc.) in conjunction with a product or product line. It is based on a contractual agreement between two business entities: the owner of the property, called licensor; and the renter of the rights, called licensee. Licensing is seen as a win-win strategy, in which the two partners can achieve their objectives (e.g., expanding the brand, its market reach, etc.). We show that, if the licensor, who acts as the leader, uses an incentive strategy that depends on the licensee advertising, then it can reach the jointly optimal solution in a decentralized way.

Keywords: Differential games; Advertising; Licensing; Incentive strategies; Stackelberg equilibrium; Cooperative solution (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (7)

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DOI: 10.1007/s10957-009-9511-x

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