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Incentive Strategies for Shelf-Space Allocation in Duopolies

In: Dynamic Games: Theory and Applications

Author

Listed:
  • Guiomar Martín-Herrän
  • Sihem Taboubi

Abstract

We examine the issue of shelf-space allocation in a marketing channel where two manufacturers compete for a limited shelf-space at a retail store. The retailer controls the shelf-space to be allocated to brands while the manufacturers make advertising decisions to build their brand image and to increase final demand (pull strategy). Manufacturers also offer an incentive designed to induce the retailer to allocate more shelf-space to their brands (push strategy). The incentive takes the form of a shelf dependent display allowance. The problem is formulated as a Stackelberg differential game played over an infinite horizon, with manufacturers as leaders. Stationary feedback equilibria are computed, and numerical simulations are carried out in order to illustrate how channel members should allocate their marketing efforts.

Suggested Citation

  • Guiomar Martín-Herrän & Sihem Taboubi, 2005. "Incentive Strategies for Shelf-Space Allocation in Duopolies," Springer Books, in: Alain Haurie & Georges Zaccour (ed.), Dynamic Games: Theory and Applications, chapter 0, pages 231-253, Springer.
    • Handle: RePEc:spr:sprchp:978-0-387-24602-4_12
    DOI: 10.1007/0-387-24602-9_12
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    Citations

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    Cited by:

    1. Yurii Averboukh, 2018. "Inverse Stackelberg Solutions for Games with Many Followers," Mathematics, MDPI, vol. 6(9), pages 1-9, August.
    2. Amrouche, Nawel & Zaccour, Georges, 2007. "Shelf-space allocation of national and private brands," European Journal of Operational Research, Elsevier, vol. 180(2), pages 648-663, July.
    3. Javier Frutos & Guiomar Martín-Herrán, 2015. "Does Flexibility Facilitate Sustainability of Cooperation Over Time? A Case Study from Environmental Economics," Journal of Optimization Theory and Applications, Springer, vol. 165(2), pages 657-677, May.

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