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Sustaining cooperation in a differential game of advertising goodwill accumulation

Author

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  • Jørgensen, Steffen
  • Gromova, Ekaterina

Abstract

The paper suggests a differential game of advertising competition among three symmetric firms, played over an infinite horizon. The objective of the research is to see if a cooperative agreement among the firms can be sustained over time. For this purpose the paper determines the characteristic functions (value functions) of individual players and all possible coalitions. We identify an imputation that belongs to the core. Using this imputation guarantees that, in any subgame starting out on the cooperative state trajectory, no coalition has an incentive to deviate from what was prescribed by the solution of the grand coalition’s optimization problem.

Suggested Citation

  • Jørgensen, Steffen & Gromova, Ekaterina, 2016. "Sustaining cooperation in a differential game of advertising goodwill accumulation," European Journal of Operational Research, Elsevier, vol. 254(1), pages 294-303.
    • Handle: RePEc:eee:ejores:v:254:y:2016:i:1:p:294-303
    DOI: 10.1016/j.ejor.2016.03.029
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    Citations

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    Cited by:

    1. Lin, Xuxun & Wang, Haiyan, 2022. "Dynamic pricing for online information services considering service duration and quality level," Omega, Elsevier, vol. 109(C).
    2. Mario A. García-Meza & Ekaterina Viktorovna Gromova & José Daniel López-Barrientos, 2018. "Stable Marketing Cooperation in a Differential Game for an Oligopoly," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 20(03), pages 1-18, September.
    3. Jian Feng & Bin Liu, 2018. "Dynamic Impact of Online Word-of-Mouth and Advertising on Supply Chain Performance," IJERPH, MDPI, vol. 15(1), pages 1-16, January.
    4. Fangju Jia & Dong‐dong Wang & Kun Zhou & Lianshui Li, 2022. "Differential decision analysis of transboundary pollution considering the participation of the central government," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 1684-1703, September.
    5. Guan, Zhimin & Ye, Tong & Yin, Rui, 2020. "Channel coordination under Nash bargaining fairness concerns in differential games of goodwill accumulation," European Journal of Operational Research, Elsevier, vol. 285(3), pages 916-930.
    6. Dmitry Gromov & Ekaterina Gromova, 2017. "On a Class of Hybrid Differential Games," Dynamic Games and Applications, Springer, vol. 7(2), pages 266-288, June.
    7. Susu Cheng & Fan Zhang, 2022. "Regulatory pressure and consumer environmental awareness in a green supply chain with retailer responsibility: A dynamic analysis," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(4), pages 1133-1151, June.
    8. Yuntao Bai & Qiang Wang & Yueling Yang, 2022. "From Pollution Control Cooperation of Lancang-Mekong River to “Two Mountains Theory”," Sustainability, MDPI, vol. 14(4), pages 1-24, February.

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