Nash Equilibriums For Co-operative Strategy When Advertising Threshold Effects Exists
Co-operative advertising, which is commonly used by the manufacturers to influence their wholesalers or retailers behavior, has received significant attention by the managers and researchers during the past few decades. It is an efficient instrument to expand advertising and promotion dollars. However, little previous cooperative advertising models consider an important advertising phenomenon, I.e. , advertising threshold effect. In fact, managers and advertising practitioners often profess some degree of belief in advertising threshold effect, which means there is essentially no sales response when the advertising input is beneath a certain level. In this paper, we propose a switching two-regime model, in only one of which advertising is effective, to illustrate how the advertising threshold effect influences the cooperative advertising program. Mediating the switch between the two regimes is a function about national advertising. We formulate a mixture of two concave advertising response functions taking advertising threshold effect into account. By considering the threshold effects, we find that four different Nash equilibriums may exist in different conditions, which is contrary to the conclusion of previous studies for co-operative advertising programs. Also, we propose the necessary or sufficient conditions which lead the four possible advertising strategy profiles to be the Nash equilibrium in this paper.
co-operative advertising advertising threshold effect supply chain coordination
LIU Yanze GOU Qinglong WU Chunxu LIANG Liang
School of Management, University of Science and Technology of China, Hefei, P. R. China, 230026
国际会议
2010 International Conference on Management(2010管理国际大会)
上海
英文
127-133
2010-07-24（万方平台首次上网日期，不代表论文的发表时间）