A Stochastic Model of Consumer Behavior and Optimal Advertising
AbstractA stochastic consumer behavior model is constructed transforming Nicosia's (Nicosia, F. M., 1966. Consumer Decision Processes. Prentice-Hall, Englewood Cliffs, New Jersey.) postulates into probability hypotheses. Nicosia's deterministic model is obtained in the mean evolutions and variance-covariances, defined by a system of linear differential equations obtained. This system, forming together with mean evolutions a closed system of five simultaneous differential equations is studied for stability, to devise optimal communication strategies and for suggesting an estimation technique.
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Bibliographic InfoArticle provided by INFORMS in its journal Management Science.
Volume (Year): 28 (1982)
Issue (Month): 9 (September)
dynamic programming: control theory; marketing: advertising/promotion; marketing: buyer behavior;
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- Tapiero, Charles, 2003. "Risk Management: An Interdisciplinary Framework," ESSEC Working Papers DR 03014, ESSEC Research Center, ESSEC Business School.
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