Abstract: Marketing channel distributor alliance is one of the main ways to improve the profit for both sides.Though the alliance is instable,both sides wish to form the alliance and construct mechanism to restrict each other through negotiation while the market structure will change from monopolization competition to Cartel alliance.This paper analyzes the probability of marketing channel distributor alliance and designs the contract mechanism based on Cartel model.

Key words: cartel model, marketing channel, distributor alliance, contract mechanism design