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A note on "Cooperative advertising, game theory and manufacturer-retailer supply chains"

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  • Xie, Jinxing
  • Ai, Song

Abstract

This note extends the results in the manufacturer-dominated game model of the paper by Li et al. (Omega 30 (2002) 347) to the case where the manufacturer's marginal profit is not large enough. In such situations, the profit of the entire supply chain under the co-op advertising mode is higher than the one under the Stackelberg game, which is consistent with the results of the original paper. However, the advertising expenditures of the manufacturer and the retailer under the co-op advertising model are not always larger than those under the Stackelberg game, which is different from the results of the original paper. Furthermore, the results are also compared with the simultaneous move game of the paper by Huang and Li (Eur. J. Oper. Res. 135 (2001) 527). The manufacturer always prefers the leader-follower structure rather than the simultaneous move structure, which is consistent with the results of the original paper. However, the retailer always prefers the simultaneous move structure rather than the leader-follower structure, which differs from the results of the original paper.

Suggested Citation

  • Xie, Jinxing & Ai, Song, 2006. "A note on "Cooperative advertising, game theory and manufacturer-retailer supply chains"," Omega, Elsevier, vol. 34(5), pages 501-504, October.
    • Handle: RePEc:eee:jomega:v:34:y:2006:i:5:p:501-504
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    1. Li, Susan X. & Huang, Zhimin & Zhu, Joe & Chau, Patrick Y. K., 2002. "Cooperative advertising, game theory and manufacturer-retailer supply chains," Omega, Elsevier, vol. 30(5), pages 347-357, October.
    2. Huang, Zhimin & Li, Susan X., 2001. "Co-op advertising models in manufacturer-retailer supply chains: A game theory approach," European Journal of Operational Research, Elsevier, vol. 135(3), pages 527-544, December.
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    2. Karray, Salma & Martín-Herrán, Guiomar & Zaccour, Georges, 2017. "Assessing the profitability of cooperative advertising programs in competing channels," International Journal of Production Economics, Elsevier, vol. 187(C), pages 142-158.
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    8. De Giovanni, Pietro & Karray, Salma & Martín-Herrán, Guiomar, 2019. "Vendor Management Inventory with consignment contracts and the benefits of cooperative advertising," European Journal of Operational Research, Elsevier, vol. 272(2), pages 465-480.
    9. Van Gorder, Robert A. & Caputo, Michael R., 2010. "Envelope theorems for locally differentiable open-loop Stackelberg equilibria of finite horizon differential games," Journal of Economic Dynamics and Control, Elsevier, vol. 34(6), pages 1123-1139, June.
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