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

This paper investigates cooperative advertising decisions in production–retailing chan-nels for seasonal products under demand seasonality. We develop analytical game-theoretic models to examine how advertising cooperation influences channel coor-dination and profit distribution between manufacturers and retailers. Two channel struc-tures are considered: a single-manufacturer–single-retailer channel and a sin-gle-manufacturer channel with two competing retailers. For each structure, Stackelberg and Nash equilibrium settings are analyzed and compared. Our results show that coop-erative advertising can serve as an effective coordination mechanism by increasing adver-tising intensity and improving channel efficiency. Retailers always benefit from manu-facturer-supported advertising through cost sharing and higher profitability, whereas the manufacturer’s incentive to participate depends on whether demand expansion out-weighs shared advertising costs. Importantly, we demonstrate that channel leadership plays a critical role: the Stackelberg equilibrium consistently dominates the Nash equilib-rium 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.