Game-Theoretic Analysis of Cooperative Advertising Decisions in Production–Retail Channels with Seasonal Demand

This paper investigates cooperative advertising decisions in production–retailing channels for seasonal products under demand seasonality. We develop analytical game-theoretic models to examine how advertising cooperation influences channel coordination and profit distribution between manufacturers and retailers. Two channel structures are considered: a single-manufacturer–single-retailer channel and a single-manufacturer channel with two competing retailers. For each structure, Stackelberg and Nash equilibrium settings are analyzed and compared. Our results show that cooperative advertising can serve as an effective coordination mechanism by increasing advertising intensity and improving channel efficiency. Retailers always benefit from manufacturer-supported advertising through cost sharing and higher profitability, whereas the manufacturer’s incentive to participate depends on whether demand expansion outweighs shared advertising costs. Importantly, we demonstrate that channel leadership plays a critical role: the Stackelberg equilibrium consistently dominates the Nash equilibrium in terms of total channel profit. This study contributes to the cooperative advertising literature by explicitly incorporating demand seasonality and competing retailers, and by clarifying when cooperative advertising leads to Pareto improvements in seasonal supply chains.