Feedback Stackelberg equilibrium strategies when the private label competes with the national brand
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We consider a noncooperative differential game where a retailer sells her own private label in addition to the manufacturer’s brand. We assume that each brand’s goodwill evolves according to a modified Nerlove-Arrow dynamics, in such a way that the advertising effort of one brand hurts the competitor’s goodwill stock. We characterize Feedback-Stackelberg pricing and advertising strategies and employ simulations to analyze their sensitivity to the main model parameters.
KeywordsMarketing channels Private label Advertising Pricing Differential games Feedback-Stackelberg equilibrium
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