Traditional marketing channel VS network marketing channel: A multi-market competition model

This paper analyses the competition relationship between two markets, the traditional marketing channels market and the network marketing channels market. Then, on based on the Bowley model and introduction of the cooperation coefficient, we establish an improved multi-market competition model of two firms competing in two relevant markets. By calculating the numerical solution, to obtain the revenue maximization, this paper discusses what quantity of the product the firm should put into and sales in each channel market, at what price should to be sold, and how to maximize the profits. Finally, we analyzed the multi-market competition and tacit collusion using the static analysis method.