Profit maximization through advertising: A nonzero sum differential game approach |
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Authors: | Leitmann G Schmitendorf W |
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Affiliation: | University of California, Berkeley, CA, USA; |
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Abstract: | This paper deals with the problem of the competition between two firms who sell substitutable products. Each firm wants to maximize its own profits. A firm's share of the market is influenced by its advertising and the advertising of its competitor. The problem is modeled as a nonzero sum differential game. Various solution concepts are applied and the corresponding "optimal" advertising rates obtained. |
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