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A Unifying Differential Game Of Advertising And Promotions

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Author Info
HASSAN BENCHEKROUN () (Department of Economics, CIREQ, McGill University, 855 Sherbrooke West, Montreal, QC, Canada, H3A-2T7, Canada)

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Abstract

The literature on advertising and promotions can be divided in two categories. A first group of models assume that promotion contributes (positively) to the goodwill towards the product, and a second group assumes that promotions reduce that goodwill. In this paper we build a differential game model where the impact of promotion on goodwill is endogenously determined. We conduct a comparative dynamics exercise. An unexpected result is that an increase in the sensitivity of sales to goodwill can lead to a decrease of the equilibrium level of sales.

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Publisher Info
Article provided by World Scientific Publishing Co. Pte. Ltd. in its journal International Game Theory Review.

Volume (Year): 09 (2007)
Issue (Month): 02 ()
Pages: 183-197
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Handle: RePEc:wsi:igtrxx:v:09:y:2007:i:02:p:183-197

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Related research
Keywords: Marketing; advertising and promotion; differential games; marketing channel;

Find related papers by JEL classification:
B4 - Schools of Economic Thought and Methodology - - Economic Methodology
C0 - Mathematical and Quantitative Methods - - General
C6 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming
C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
D5 - Microeconomics - - General Equilibrium and Disequilibrium
D7 - Microeconomics - - Analysis of Collective Decision-Making
M2 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics

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This page was last updated on 2010-1-4.

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