Cooperative (co-op) advertising is an arrangement between manufacturer and retailer, where two members initiate their respective advertising to help develop brand, motivate sales, and other purposes. This paper focuses on cooperative advertising in a supply chain consisting of one manufacturer and one retailer. As two basic elements of a supply chain, the channel power structure and information structure affect the firm’s pricing and advertising decisions. We attempt to investigate how they optimally decide their marginal returns and advertising investments. Utilizing the Stackelberg game theory, we derive the equilibrium of five scenarios in two different cases, i.e., (1) either the manufacturer or the retailer is acting as the Stackelberg leader and (2) whether the Stackelberg leader knows the advertising investment of his follower. Then we make a comparison and obtain some managerial implications as follows: (1) the supply chain power structure and the relative advertising effectiveness coefficient exert great influence on the optimal supply chain decisions, (2) the supply chain members’ profit is not parallel to their corresponding power structure, if the retailer’s advertising effectiveness is greater than the manufacturer’s, the Manufacturer-dominated Stackelberg game is a win–win strategy, and vice versa, (3) the dominant member can improve his and the overall performance of the supply chain by having the advertising information of the other.

中文翻译：

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不同渠道权力结构下的合作广告模式

合作（co-op）广告是制造商和零售商之间的一种安排，其中两个成员发起各自的广告以帮助发展品牌、促进销售和其他目的。本文重点研究由一个制造商和一个零售商组成的供应链中的合作广告。作为供应链的两个基本要素，渠道权力结构和信息结构影响企业的定价和广告决策。我们试图调查他们如何以最佳方式决定他们的边际回报和广告投资。利用 Stackelberg 博弈理论，我们推导出两种不同情况下的五种情景的均衡，即，（1）制造商或零售商充当 Stackelberg 领导者；（2）Stackelberg 领导者是否知道其追随者的广告投资.