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Optimal Advertising and Pricing in a New-Product Adoption Model

Author

Listed:
  • S. P. Sethi

    (University of Texas at Dallas)

  • A. Prasad

    (University of Texas at Dallas)

  • X. He

    (University of North Carolina at Charlotte)

Abstract

A model of new-product adoption is proposed that incorporates price and advertising effects. An optimal control problem that uses the model as its dynamics is solved explicitly to obtain the optimal price and advertising effort over time. The model has a great potential to be used in obtaining solutions and insights in a variety of differential game settings.

Suggested Citation

  • S. P. Sethi & A. Prasad & X. He, 2008. "Optimal Advertising and Pricing in a New-Product Adoption Model," Journal of Optimization Theory and Applications, Springer, vol. 139(2), pages 351-360, November.
    • Handle: RePEc:spr:joptap:v:139:y:2008:i:2:d:10.1007_s10957-008-9472-5
    DOI: 10.1007/s10957-008-9472-5
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    References listed on IDEAS

    as
    1. A. Prasad & S. P. Sethi, 2004. "Competitive Advertising Under Uncertainty: A Stochastic Differential Game Approach," Journal of Optimization Theory and Applications, Springer, vol. 123(1), pages 163-185, October.
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    5. Dan Horsky & Leonard S. Simon, 1983. "Advertising and the Diffusion of New Products," Marketing Science, INFORMS, vol. 2(1), pages 1-17.
    6. Prasad A. Naik & Ashutosh Prasad & Suresh P. Sethi, 2008. "Building Brand Awareness in Dynamic Oligopoly Markets," Management Science, INFORMS, vol. 54(1), pages 129-138, January.
    7. Bruce Robinson & Chet Lakhani, 1975. "Dynamic Price Models for New-Product Planning," Management Science, INFORMS, vol. 21(10), pages 1113-1122, June.
    8. Frank M. Bass & Anand Krishnamoorthy & Ashutosh Prasad & Suresh P. Sethi, 2005. "Generic and Brand Advertising Strategies in a Dynamic Duopoly," Marketing Science, INFORMS, vol. 24(4), pages 556-568, February.
    9. Sorger, Gerhard, 1989. "Competitive dynamic advertising : A modification of the Case game," Journal of Economic Dynamics and Control, Elsevier, vol. 13(1), pages 55-80, January.
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