Co-op Advertising Analysis within a Supply Chain Based on the Three-Stage Non-cooperate Dynamic Game Model

Abstract

This paper presents a three-stage non-cooperate dynamic game model in one manufacturer and two retailers. Through model solution and analysis, three conclusions are following. First, the manufacturer will increase the product's price continuously to obtain more and more profits. Second, when all members adopt non-cooperate attitude, the retailer who prefer to invest in local advertising will decrease the local advertising level continuously. Third, if retailer is willing to invest local advertising, he will obtain more profits than the one which don't invest, even if all members choose non-cooperative attitude.