Advertising competition and industry channel structure

Wang, Chih-Jen; Chen, Ying‐Ju; Wu, Chi-Cheng

doi:10.1007/s11002-010-9113-2

Cited by 35 publications

(29 citation statements)

References 31 publications

(45 reference statements)

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“…Many researchers extended the above mentioned studies by adding other dimensions such as managerial incentives (Bhardwaj and Balasubramanian, 2005), non-price competition (Zhao et al, 2009;Liu and Tyagi, 2011;Wang et al, 2011;Zhang et al, 2012;Zhou and Cao, 2014), risk aversion (Xiao and Choi, 2009), number of players (Anderson and Bao, 2010), demand uncertainty (Cao et al, 2010). Considering managerial incentives, Bhardwaj and Balasubramanian (2005) demonstrated that an asymmetric channel structure with one integrated manufacturer and the other decentralized manufacturer arises in equilibrium.…”

Section: Literature Reviewmentioning

confidence: 99%

“…We depart from their studies by considering endogenous channel strategies in a mixed duopoly, while they consider channel strategies of private firms. Comparisons between integrated and decentralized channels were conducted by Anderson and Bao (2010), Wang et al (2011) andZhang et al (2012), with focuses on the effect of number of players, persuasive advertising and informative advertising, respectively, but they did not study endogenous channel strategies.…”

Section: Literature Reviewmentioning

confidence: 99%

“…With a wholesale-price contract, if the private firm decentralizes, the introduction of an independent retailer will cause the wellknown "double marginalization" problem, which tends to reduce the private firm's profit. On the other hand, under decentralization the independent retailer serves as a buffer that alleviates competition between channels and tends to increase the private firm's profit, which is the so-called "retailer buffer" effect (McGuire and Staelin, 1983;Wang et al, 2011). In general, between these two conflicting effects of decentralization, the "retailer buffer" effect may outweigh the "double marginalization" effect when products are highly substitutable, i.e., when the competition is intense.…”

Section: Channel Structure Idmentioning

confidence: 99%

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Distribution channel strategies in a mixed market

Bian

Guo

2015

International Journal of Production Economics

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a b s t r a c tThis paper studies equilibrium channel strategies in a mixed market with a public firm and a private firm. The public firm is concerned with social welfare, while the private firm aims to maximize its own profit. Each firm decides whether to adopt an integrated or a decentralized channel. We examine two standard market competition modes, Bertrand and Cournot. Within each competition mode, we consider two typical vertical contracts, wholesale-price and two-part tariff contracts. Our results suggest that equilibrium channel structures depend on the market competition mode, the vertical contract form, and the level of product substitutability. Specifically, the channel strategy of the private firm depends mainly on the vertical contract form: under a two-part tariff contract, the private firm always chooses decentralization; under a wholesale-price contract, the private firm chooses integration for most scenarios except for highly substitutable products under Bertrand competition (i.e., under very intense competition). The channel strategy of the public firm depends mainly on the competition mode: under Bertrand competition, the public firm always chooses decentralization; under Cournot competition, the public firm always chooses the opposite of the private firm's strategy.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: Channel Structure Idmentioning

confidence: 99%

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Distribution channel strategies in a mixed market

Bian

Guo

2015

International Journal of Production Economics

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“…However, a recent study by Wang et al. () shows that when manufacturers compete in nonprice variables such as advertising, a decentralized channel may intensify competition between manufacturers and harm the manufacturers' profits.…”

Section: Introductionmentioning

confidence: 99%

Downstream horizontal integration and multiunit dealership

Martín‐Herrán

Sigué

Zaccour

2013

Int Trans Operational Res

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In this paper, a game theoretical model featuring a manufacturer and two dealers has been proposed to investigate the belief that horizontal integration in an established network and granting of regional multiunit dealership in a growing network improve the manufacturer's profit. Some of the main results are as follows: (1) the manufacturer and dealers are mutually better off when integration and multiunit dealership lead to an increase in consumer demand through higher prices and better investments in services and national advertising, (2) downstream integration and multiunit dealership harm the manufacturer's profit when the integrated dealer aims to free‐ride the manufacturer's brand or local service has no impact on consumer demand, (3) under certain conditions, both the manufacturer and dealers prefer downstream competition to integration regardless of whether it increases or reduces retail prices. Finally, mechanisms to implement horizontally integrated strategies in an established dealer network made of multiple single‐unit dealers such as the use of resale price maintenance (RPM), exclusive territory agreement, and dealer cuts are discussed.

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“…There has been an increase in empirical research in both economics and business fields that analyzes and quantifies the degree of competition (Eilon, 1993;Furrer and Thomas, 2000;Heiman, 2010;Liu and Nagurney, 2011;Pech and Slade, 2003;Schiavone, 2011;Sinha, 2000;Tsai and Hung, 2009;Wang et al, 2011;Xiao and Qi, 2008;Yan, Tang and Lee, 2007;Yao and Liu, 2005;Zhang, 2006). Particularly, the banking industry has fuelled a large stream of literature on competition and has been a topic of considerable interest, especially since the 80s, when significant changes in structure and competition took place in several financial markets (Lozano-Vivas and Pastor, 2010;Maudos and Pérez, 2003;Oroz and Salas, 2003).…”

Section: Introductionmentioning

confidence: 99%

Who performs a stronger response to whom? Detecting individual competitive actions and reactions

Nicolau

Ruiz‐Moreno

2013

Rev Manag Sci

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This study analyzes the degree of competition through individual actions and reactions.Empirical support for this analysis has derived mainly from structural econometric models describing the nature of competition. This analysis extends the existing literature by empirically considering a direct measurement of competition through the analysis of the competitive actions and responses, and describing how firms compete within and between strategic groups. We estimate the firms' conduct in the Spanish deposits market with 146 firms and 18,888 observations. This is a specially compelling context for the banking industry, in which a deregulation process gives rise to the adoption of aggressive strategies seeking to increase the market shares of deposit accounts; thus, producing a turbulent situation of increasing rivalry. Our results offer a deeper understanding of the firms' competitive behavior, since we identify different patterns of actions and reactions depending upon the strategic group the firm belongs to.

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Advertising competition and industry channel structure

Abstract: Distribution channel, Competition, Advertising, Game theory,

Cited by 35 publications

References 31 publications

Distribution channel strategies in a mixed market

Distribution channel strategies in a mixed market

Downstream horizontal integration and multiunit dealership

Who performs a stronger response to whom? Detecting individual competitive actions and reactions

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