Cooperative Advertising Analysis within a Supply Chain Based on Game Theory

This paper presents two types of three-stage game theory model for studying a cooperative advertising problem in one manufacturer and two retailers. The manufacturer and one retailer invest in national advertising and local advertising, respectively. Meanwhile, the manufacturer agrees to share part of the local advertising cost with the retailer. But another retailer refuses to take part incooperative advertising. The manufacturer and retailer who put invest in cooperative advertising could choose cooperative or non-cooperative attitude, but another retailer always chooses non-cooperative attitude. We select four decision variables including local advertising effort, two retailers´ marginal profit, the price of product and discuss two three-stage dynamic game models according to the player´s attitude whether cooperative or not. Cooperative and noncooperative equilibrium are discussed respectively.