Optimal Pricing and Advertising Policies for New Product Oligopoly Models. Revision PDF Download
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Author: Gerald L. Thompson
Publisher:
ISBN:
Category :
Languages : en
Pages : 43
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Book Description
In this paper our previous work on monopoly and oligopoly new product models is extended by the addition of pricing as well as advertising control variables. These models contain Bass's demand growth model, and the Vidale-Wolfe and Ozga advertising models, as well as the production learning curve model and an exponential demand function. The problem of characterizing an optimal pricing and advertising policy over time is an important question in the field of marketing as well as in the areas of business policy and competitive economics. These questions are particularly important during the introductory period of a new product, when the effects of the learning curve phenomenon and market saturation are most pronounced.
Author: Gerald L. Thompson
Publisher:
ISBN:
Category :
Languages : en
Pages : 43
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Book Description
In this paper our previous work on monopoly and oligopoly new product models is extended by the addition of pricing as well as advertising control variables. These models contain Bass's demand growth model, and the Vidale-Wolfe and Ozga advertising models, as well as the production learning curve model and an exponential demand function. The problem of characterizing an optimal pricing and advertising policy over time is an important question in the field of marketing as well as in the areas of business policy and competitive economics. These questions are particularly important during the introductory period of a new product, when the effects of the learning curve phenomenon and market saturation are most pronounced.
Author: Gerald Luther Thompson
Publisher:
ISBN:
Category : Advertising
Languages : en
Pages : 39
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Book Description
Author: Gerald L. Thompson
Publisher:
ISBN:
Category :
Languages : en
Pages : 39
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Book Description
Author:
Publisher:
ISBN:
Category : Science
Languages : en
Pages : 828
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Author: Manak Gupta
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
The problem of optimal joint pricing and advertising decision making for a new product facing potential competitive entry has received inadequate attention. We propose a model that attempts to find the optimal price - advertising frontier in the face of potential competitive entry that maximizes total discounted profits for pre- and post-entry periods. We find that a firm would charge the price that equates price elasticity to marginal revenue product of advertising (as predicted by [Dorfman, R. and Steiner, P.O. (1954), Optimal Advertising and Optimal Quality, American Economic Review, 44(5), 826-836.]) only when the potential effects of pricing and advertising on its market share are not considered. Under optimal conditions, aware that market share is subject to erosion, the firm charges a somewhat lower price than the profit maximizing price, and sets an advertisement expense that is somewhat higher than the profit-maximizing advertising level as predicted by Cournot's monopolistic setting. We illustrate the applicability of our model using business product examples taken from several industries including operating systems, software, pharmaceutical, and telephone switching. Directions for future research with implications for B2B managers (for example, the possible effects of preannouncement to forestall competitive entry) are discussed.
Author: Xavier Vives
Publisher: MIT Press (MA)
ISBN: 9780262220606
Category : Business & Economics
Languages : en
Pages : 446
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Book Description
Applies a modern game-theoretic approach to develop a theory of oligopoly pricing. The text relates classic contributions to the field of modern game theory and discusses basic game-theoretic tools and equilibrium, paying particular attention to developments in the theory of supermodular games.
Author: Eunsang Yoon
Publisher:
ISBN:
Category : New products
Languages : en
Pages : 32
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Author: Kurt Helmes
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
In Sethi et al. introduced a particular new-product adoption model. They determine optimal advertising and pricing policies of an associated deterministic infinite horizon discounted control problem. Their analysis is based on the fact that the corresponding Hamilton-Jacobi-Bellman (HJB) equation is an ordinary nonlinear differential equation which has an analytical solution. In this paper, generalizations of their model are considered. We take arbitrary adoption and saturation effects into account, and solve finite and infinite horizon discounted variations of associated control problems. If the horizon is finite, the HJB-equation is a 1st order nonlinear partial differential equation with specific boundary conditions. For a fairly general class of models we show that these partial differential equations have analytical Solutions. Explicit formulas of the value function and the optimal policies are derived. The controlled Bass model with isoelastic demand is a special example of the class of controlled adoption models to be examined and will be analyzed in some detail.
Author: Rainer Schlosser
Publisher:
ISBN:
Category :
Languages : en
Pages : 29
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Book Description
In this paper we analyze stochastic dynamic pricing and advertising differential games in special oligopoly markets with constant price and advertising elasticities. We consider the sale of perishable as well as durable goods and include adoption effects in the demand. For the individual firms we derive solution formulas of the value function and of the optimal feedback policies. Furthermore, efficient simulation techniques are used to evaluate optimally controlled sales processes over time. This way the evolution of optimal controls as well as the firm's profit distributions are analyzed. Moreover, we show that the market power of the competing firms is exactly the same as in the deterministic version of the model. We also find that as soon as saturation effects in the demand are involved, the optimal profits of the deterministic model can be dominated by the optimal expected profits of the stochastic model.
Author:
Publisher:
ISBN:
Category : Science
Languages : en
Pages : 672
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