We investigate the dynamic advertising policies of two competing firms in a duopolistic industry, assuming a predatory phenomenon between their advertising campaigns. The resulting model is a differential game which is not linear-quadratic. We show that there exists a Markovian Nash equilibrium, and that it leads to time constant advertising strategies. According to this model, predatory advertising produces a negative externality: the interference between the advertising campaigns decreases the total demand of the market.
A goodwill model with predatory advertising / Luca Grosset;Paolo Roberti;Bruno Viscolani. - In: OPERATIONS RESEARCH LETTERS. - ISSN 0167-6377. - STAMPA. - 39:(2011), pp. 419-422. [10.1016/j.orl.2011.10.001]
A goodwill model with predatory advertising
ROBERTI, PAOLO;
2011
Abstract
We investigate the dynamic advertising policies of two competing firms in a duopolistic industry, assuming a predatory phenomenon between their advertising campaigns. The resulting model is a differential game which is not linear-quadratic. We show that there exists a Markovian Nash equilibrium, and that it leads to time constant advertising strategies. According to this model, predatory advertising produces a negative externality: the interference between the advertising campaigns decreases the total demand of the market.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
