On the coordination of dynamic marketing channels and two-part tariffs

An important result in a static marketing channel is that the manufacturer can reach the vertically integrated channel solution through the use of a two-part wholesale price. This means that the collectively optimal solution is achieved in a decentralized way, i.e., as an equilibrium. This paper investigates under which conditions this result remains valid in a static marketing channel where demand also depends on players’ advertising. Second, it shows that different results are reached when one considers a dynamic marketing channel.