| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 1143247 | Operations Research Letters | 2011 | 4 Pages |
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.
Related Topics
Physical Sciences and Engineering
Mathematics
Discrete Mathematics and Combinatorics
Authors
Luca Grosset, Paolo Roberti, Bruno Viscolani,