Oligopoly advertising strategies with market expansion

✍ Scribed by Gila E. Fruchter

• Book ID: 101287581
• Publisher: John Wiley and Sons
• Year: 1999
• Tongue: English
• Weight: 107 KB
• Volume: 20
• Category: Article
• ISSN: 0143-2087
• DOI: 10.1002/(sici)1099-1514(199907/08)20:4<199::aid-oca653>3.0.co;2-m

✦ Synopsis

This study extends the literature of dynamic advertising competition by allowing oligopoly competition and market expansion that results from advertising. We "nd how advertising actions a!ect market development and how, conversely, market development in#uences advertising policies over time. Modelling the competition by a di!erential game, we solve for both time-variant closed-loop and time-invariant feedback Nash equilibrium strategies. The time-variant closed-loop strategy depends on a "rm's own sales rates and the time-invariant feedback strategy depends on the growth of the market. We discuss the marketing implications of the results.