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Advertising Decisions In A Vertical Distribution Channel

Author

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  • BRUNO VISCOLANI

    (Department of Pure and Applied Mathematics, University of Padua, Via Trieste 63, I-35121 Padua, Italy)

Abstract

A manufacturer and a retailer are the members of a simple distribution channel for a particular product in a segmented market. The advertising efforts of the two agents have a joint effect on the goodwill of the different market segments and then on the demand. The channel members aim at maximizing their profits, by choosing suitable advertising media and efforts. We focus mainly on competition between manufacturer and retailer, obtaining Nash equilibrium strategies, in the contexts of linear and concave demand. We consider also the possibility of cooperation, obtaining the coordinated channel optimal decisions.

Suggested Citation

  • Bruno Viscolani, 2009. "Advertising Decisions In A Vertical Distribution Channel," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 11(03), pages 273-284.
    • Handle: RePEc:wsi:igtrxx:v:11:y:2009:i:03:n:s0219198909002315
    DOI: 10.1142/S0219198909002315
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    References listed on IDEAS

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    1. Dockner,Engelbert J. & Jorgensen,Steffen & Long,Ngo Van & Sorger,Gerhard, 2000. "Differential Games in Economics and Management Science," Cambridge Books, Cambridge University Press, number 9780521637329, October.
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    Cited by:

    1. Viscolani, Bruno, 2012. "Pure-strategy Nash equilibria in an advertising game with interference," European Journal of Operational Research, Elsevier, vol. 216(3), pages 605-612.

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    More about this item

    Keywords

    Game theory; advertising; market segmentation; M37; M31; C72; C61; 90B60; 91A10; 91A12;
    All these keywords.

    JEL classification:

    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • C0 - Mathematical and Quantitative Methods - - General
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

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