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Retail competition and cooperative advertising

Authors:	Xiuli HeAnand Krishnamoorthy Ashutosh PrasadSuresh P Sethi

Institution:	^a Belk College of Business, Univerisy of North Carolina at Charlotte, NC 28223, United States ^b College of Business Administration, University of Central Florida, Orlando, FL 32816, United States ^c School of Management, University of Texas at Dallas, Richardson, TX 75080, United States

Abstract:	We consider a cooperative advertising channel consisting of a manufacturer selling its product through a retailer in competition with another independent retailer. The manufacturer subsidizes its retailer’s advertising only when a certain threshold is positive. Moreover, the manufacturer’s support for its retailer is higher under competition than in its absence.

Keywords:	Cooperative advertising Retail competition Sales-advertising models Marketing channel Differential games Feedback Stackelberg equilibrium
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