This work deals with cooperative advertising in a manufacturer-retailer supply channel using differential game theory. It considers the manufacturer as the Stackelberg leader and the retailer as the follower. It incorporates the manufacturer’s advertising effort into Sethi’s sales-advertising dynamics, and considers its effect on the retail advertising effort, the awareness share, the players’ payoffs, and the channel payoff. | Yugoslav Journal of Operations Research 28 (2018), Number 4, 539-566 DOI: MODELING DYNAMIC COOPERATIVE ADVERTISING IN A DECENTRALIZED CHANNEL Peter E. EZIMADU Department of Mathematics, Delta State University, Abraka, Nigeria peterezimadu@ Chukwuma R. NWOZO Department of Mathematics, University of Ibadan, Ibadan, Nigeria crnwozo@ Received: May 2015 / Accepted: July 2018 Abstract: This work deals with cooperative advertising in a manufacturer-retailer supply channel using differential game theory. It considers the manufacturer as the Stackelberg leader and the retailer as the follower. It incorporates the manufacturer’s advertising effort into Sethi’s sales-advertising dynamics, and considers its effect on the retail advertising effort, the awareness share, the players’ payoffs, and the channel payoff. These are achieved by considering two channel structures: a situation where retail advertising is subsidized, and a situation where it is not. In both situations, it obtains the Stackelberg equilibrium, which characterizes the effects of the manufacturer’s advertising effort, including the relationships between the manufacturer’s advertising effort and the retailer’s advertising effort. The work shows that the direct involvement of the manufacturer in advertising is worthwhile. Keywords: Cooperative Advertising, Supply Channel, Differential game Sethi’s sales-advertising model. MSC: 49N70, 91A23. 540 , / Modeling Dynamic Cooperative Advertizing About the deceased professor Chukwuma R. Nwozo Chukwuma R. Nwozo was an Associate Professor at the Department of Mathematics, University of Ibadan, Nigeria. He was a scholar with a lot of local, national and international publications in highly rated journals. His areas of research were Operations Research, Optimization, and Financial Mathematics. He was due for the rank of a Professor which was yet to be announced at his passing on which took
