Title

Advertising competition with market expansion for finite horizon firms

Authors

Authors

F. M. Bass; A. Krishnamoorthy; A. Prasad;S. P. Sethi

Comments

Authors: contact us about adding a copy of your work at STARS@ucf.edu

Abbreviated Journal Title

J. Ind. Manag. Optim.

Keywords

marketing; advertising; differential games; optimal control; dynamic; duopoly; OPERATIONS-RESEARCH; MODEL; GAME; Engineering, Multidisciplinary; Operations Research & Management; Science; Mathematics, Interdisciplinary Applications

Abstract

Firms that want to increase the sales of their brands through advertising have the choice of capturing market share from their competitors through brand advertising, or increasing primary demand for the category through generic advertising. In this paper, differential game theory is used to analyze the effects of the two types of advertising decisions made by firms offering a product in a dynamic duopoly. Each firm's sales depend not only on its own and its competitor's brand advertising strategies, but also on the generic advertising expenditures of the two firms. Closed-loop Nash equilibrium solutions are obtained for symmetric and asymmetric competitors in a finite-horizon setting. The analysis for the symmetric case results in explicit solutions, and numerical techniques are employed to solve the problem for asymmetric firms.

Journal Title

Journal of Industrial and Management Optimization

Volume

1

Issue/Number

1

Publication Date

1-1-2005

Document Type

Article

Language

English

First Page

1

Last Page

19

WOS Identifier

WOS:000240804200003

ISSN

1547-5816

Share

COinS