The Impact of Manufacturers' Wholesale Prices on a Retailer's Shelf‐Space and Pricing Decisions*

This article examines shelf‐space allocation and pricing decisions in the marketing channel as the results of a static game played à la Stackelberg between two manufacturers of competing brands and one retailer. The competing manufacturers act as leaders that play a simultaneous and noncooperative game. They fix their transfer prices by taking into account the shelf‐space allocation and price‐markup decisions of their common exclusive dealer. The results indicate that the wholesale prices of brands are strongly linked to their share of the shelf. The main results of our numerical simulations may be summarized as follows: first, the lower the unit cost and/or the greater the price elasticity, the greater the shelf space allocated to that brand. Second, the higher the shelf‐space elasticity, the lower are the wholesale prices and the profits of all channel members.     

Managing terror. Public health officials learn lessons from bioterrorism attacks

When a photo-journalist presented with the first case of inhalation anthrax in the United States in 23 years, it marked the worse case of biological terrorism in our nation's history. It also marked a significant management challenge for numerous local, state and federal officials. Review what was learned and how we can better prepare for future attacks.