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| Author: | Fruchter, G. Kalish, S. |
| Title: | Closed-loop advertising strategies in a duopoly |
| Journal: | Management Science
1997 : JAN, VOL. 43:1, p. 54-63 |
| Index terms: | MANAGEMENT SCIENCE ADVERTISING DUOPOLY |
| Language: | eng |
| Abstract: | Using the Lanchester model to describe the dynamics of the market where two firms compete for customers by advertising, the authors solve the problem of determining an optimal advertising strategy for maximum discounted profits. The authors develop both open- and closed-loop strategies and explain the relationship between them. Using a new mathematical approach, the authors prove that their closed-loop solution is a global Nash equilibrium. The closed-loop strategy is time-variant and depends linearly on the actual market share. |
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