Coordinating Static and Dynamic Supply Chains with Advertising through Two-Part Tariffs

Lambertini, Luca (2013) Coordinating Static and Dynamic Supply Chains with Advertising through Two-Part Tariffs. Bologna: Dipartimento di Scienze economiche - DSE, p. 32. DOI 10.6092/unibo/amsacta/3682. In: Quaderni - Working Paper DSE (874). ISSN 2282-6483.
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Abstract

Zaccour (2008) investigates the behaviour of a marketing channel where firms invest in advertising to increase brand equity, showing that an exogenous twopart tariff cannot be used to replicate the vertically integrated monopolist’s performance. I revisit the same model proving the existence of a multiplicity of franchising contracts taht can do the job. In particular, I set out by illustrating an optimal two-part tariff specified as a linear function of the upstream firm’s advertising effort, performing this task both in the static and in the dynamic game. then, I show that an analogous result emerges (i) in the static game by writing the fixed component of the two-part tariff as a non-linear function of the manufacturer’s advertising effort; and (ii) by using a contract which is linear in the brand equity, in the dynamic case.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Lambertini, Luca
Keywords
marketing channel, vertical relations, vertical integration, advertising
Subjects
ISSN
2282-6483
DOI
Deposit date
24 May 2013 10:17
Last modified
03 Oct 2013 07:56
URI

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