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A Game Theoretic Framework for Competing/Cooperating Retailers under price and advertising dependent demand

Dhouha Dridi and Slim Ben Youssef

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, we develop a game theoretic model for cooperative advertising in a supply chain consisting of a monopolistic manufacturer selling its product to the consumer only through competing duopolistic retailers. We consider a new form of the demand function which is an additive form. The demand is influenced by both retail price and advertising expenditures. To identify optimal advertising and pricing decisions, we discuss three possible games (two non cooperative games including Stackelberg-Cournot and Stackelberg-Collusion, and one cooperative game) and then we compare the various decision variables and the profits for all cases and also with similar results of the existing literature to develop some important insights.

Keywords: game theory; supply chain; pricing; advertising; cooperative advertising; retail competition; retail cooperation; cooperation. (search for similar items in EconPapers)
JEL-codes: C7 M3 (search for similar items in EconPapers)
Date: 2015-03-29
New Economics Papers: this item is included in nep-com, nep-gth and nep-mkt
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