AbstractStatistical analysis is used for a decision situation involving a vertical cooperative advertising venture. A product is sold from a company to an independent agent, in which a portion of the agent advertising expense is paid by the company. A typical example is the company-to-agent relation between a soft drink manufacturer and its bottlers (distributors). The object of the analysis is to determine an optimal setting of the product price between company and agent, the advertising subsidy paid to the agent by the company and the advertising level of the agent. It is demonstrated via a real-world study that these decisions may be improved by use of statistical analysis.