Optimizing Manufacturer Profit In Downstream Retail Markets Under Conditions of Uncertainty

Abstract

This paper presents the results of three differing sales incentives,
from the manufacturer, in models involving a manufacturer selling a product to
Cournot-type retailers competing in the retail market. We investigate the effectiveness
of these incentives under two scenarios: profit maximizing retailers and retailers
with an incentive function that is a mix between sales and profits. The optimal sales
incentive is discussed.