Stackelberg leadership in a marketing channel. (English) Zbl 0992.91029
Summary: This paper provides an answer to the question who should, if any, lead a marketing channel? We consider a channel consisting of one manufacturer and one retailer where each player controls his advertising rate and margin. Supposing that advertising has a carry over effect on demand, we adopt a dynamic model. Nash and Stackelberg equilibria are characterised and outcomes compared with an efficient coordinated solution. Our findings suggest that manufacturer’s leadership reduces inefficiency in a channel and is more beneficial to the consumer.
MSC:
91B24 | Microeconomic theory (price theory and economic markets) |
91A80 | Applications of game theory |
91A40 | Other game-theoretic models |
References:
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