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Cooperative Advertising with Bilateral Participation
Author(s) -
Zhang Jihua,
Xie Jinxing,
Chen Bintong
Publication year - 2013
Publication title -
decision sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.238
H-Index - 108
eISSN - 1540-5915
pISSN - 0011-7315
DOI - 10.1111/j.1540-5915.2012.00382.x
Subject(s) - channel (broadcasting) , pareto principle , distribution (mathematics) , function (biology) , advertising , microeconomics , economics , business , computer science , operations management , mathematics , telecommunications , mathematical analysis , evolutionary biology , biology
We study cooperative (co‐op) advertising strategies in a two‐tier distribution channel and extend the popular unilateral participation strategy to bilateral participations. Our research shows that a properly designed bilateral participation has several advantages over unilateral participation. Bilateral participation is capable of coordinating the distribution channel under a very general demand function. In addition, when channel members determine participation parameters endogenously, the bilateral participation improves the channel efficiency and leads to a Pareto improvement over the corresponding unilateral participation.