In the real world, revenue maximization behavior may prevail in various markets. To understand this phenomenon, we develop a two-population model with two-vertically integrated channels. Every channel consists of one ...In the real world, revenue maximization behavior may prevail in various markets. To understand this phenomenon, we develop a two-population model with two-vertically integrated channels. Every channel consists of one manufacturer and many （a sufficiently large number of） retailers that sell products in different markets by adopting pure marketing objective strategies： profit maximization and revenue maximization. We study the marketing objective behaviors in the quantity-setting duopoly and the price-setting duopoly situations respectively from an indirect evolutionary point of view. In the quantity-setting duopoly situation, we find that whether the equilibrium is an evolutionarily stable strategy depends on the type of strategic iateraction （substitutes or complements）, relative unit cost, market scale, etc. We extend it to the case with continuous preferences. We argue that revenue maximization may be an evolutionarily stable strategy and profit maximization strategy may be unstable. Under proper conditions, revenue maximization behavior can coexist with profit maximization behavior. In the price-setting duopoly situation with linear demand functions, we find that profit maximization is always an evolutionarily stable strategy and revenue maximization behavior will gradually become extinct. The extended model has a similar result but the retailers may compromise the two pure strategies.展开更多
基金the National Natural Science Foundation of China under grant 70301014 and 70571034 the Fund for "Study on the Evolution of Complex Economic System" at "Innovation Center of Economic Transition and Development of Nanjing University" of Ministry of Education, China
文摘In the real world, revenue maximization behavior may prevail in various markets. To understand this phenomenon, we develop a two-population model with two-vertically integrated channels. Every channel consists of one manufacturer and many （a sufficiently large number of） retailers that sell products in different markets by adopting pure marketing objective strategies： profit maximization and revenue maximization. We study the marketing objective behaviors in the quantity-setting duopoly and the price-setting duopoly situations respectively from an indirect evolutionary point of view. In the quantity-setting duopoly situation, we find that whether the equilibrium is an evolutionarily stable strategy depends on the type of strategic iateraction （substitutes or complements）, relative unit cost, market scale, etc. We extend it to the case with continuous preferences. We argue that revenue maximization may be an evolutionarily stable strategy and profit maximization strategy may be unstable. Under proper conditions, revenue maximization behavior can coexist with profit maximization behavior. In the price-setting duopoly situation with linear demand functions, we find that profit maximization is always an evolutionarily stable strategy and revenue maximization behavior will gradually become extinct. The extended model has a similar result but the retailers may compromise the two pure strategies.
