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On a cooperative advertising model for a supply chain with one manufacturer and one retailer

  • Ahmadi-Javid, Amir
  • Hoseinpour, Pooya
Registered author(s):

    Huang and Li (2001), Huang et al. (2002), Li et al. (2002), Xie and Ai (2006) and Yue et al. (2006) recently studied a game-theoretic model for cooperative advertising in a supply chain consisting of one manufacturer and one retailer. However, the sales-volume (demand) function considered in this model can become negative for some values of the decision variables, and in fact, this does happen for the proposed Stackelberg and Nash equilibrium solutions. Yue et al. (2006) acknowledge the negativity problem and suggest two constraints to fix it; however, they do not incorporate these constraints into their mathematical analysis. In this paper, we show that the results obtained by analyzing the advertising model under the constraints suggested by Yue et al. can differ significantly from those obtained in the previous papers.

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    Article provided by Elsevier in its journal European Journal of Operational Research.

    Volume (Year): 219 (2012)
    Issue (Month): 2 ()
    Pages: 458-466

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    Handle: RePEc:eee:ejores:v:219:y:2012:i:2:p:458-466
    Contact details of provider: Web page: http://www.elsevier.com/locate/eor

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    1. Salma Karray & Georges Zaccour, 2007. "Effectiveness Of Coop Advertising Programs In Competitive Distribution Channels," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 9(02), pages 151-167.
    2. Jorgensen, Steffen & Zaccour, Georges, 2003. "Channel coordination over time: incentive equilibria and credibility," Journal of Economic Dynamics and Control, Elsevier, vol. 27(5), pages 801-822, March.
    3. Xie, Jinxing & Wei, Jerry C., 2009. "Coordinating advertising and pricing in a manufacturer-retailer channel," European Journal of Operational Research, Elsevier, vol. 197(2), pages 785-791, September.
    4. 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.
    5. 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.
    6. 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.
    7. Yue, Jinfeng & Austin, Jill & Wang, Min-Chiang & Huang, Zhimin, 2006. "Coordination of cooperative advertising in a two-level supply chain when manufacturer offers discount," European Journal of Operational Research, Elsevier, vol. 168(1), pages 65-85, January.
    8. Jorgensen, Steffen & Taboubi, Sihem & Zaccour, Georges, 2003. "Retail promotions with negative brand image effects: Is cooperation possible?," European Journal of Operational Research, Elsevier, vol. 150(2), pages 395-405, October.
    9. Szmerekovsky, Joseph G. & Zhang, Jiang, 2009. "Pricing and two-tier advertising with one manufacturer and one retailer," European Journal of Operational Research, Elsevier, vol. 192(3), pages 904-917, February.
    10. Karray, Salma & Zaccour, Georges, 2006. "Could co-op advertising be a manufacturer's counterstrategy to store brands?," Journal of Business Research, Elsevier, vol. 59(9), pages 1008-1015, September.
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