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.
Full text available as:
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
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.
Document type
Monograph
(Working Paper)
Creators
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
Other metadata
Document type
Monograph
(Working Paper)
Creators
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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