Group for Research in Decision Analysis


Pricing and Comparative-Advertising Equilibrium Strategies in a Dynamic Marketing Channel

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We consider a marketing channel where a retailer sells, along the manufacturer’s brand, her own private label. We assume that each player invests in advertising in order to build the brand’s goodwill. One distinctive feature of this paper is the introduction of comparative advertising in the form of a negative impact on other player’s goodwill stock evolution. We characterize Feedback-Nash pricing and advertising strategies and assess the impact of the vulnerability parameters of comparative advertising on these strategies.

, 22 pages