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A simple model of online marketing, production, profit and growth

Author

Listed:
  • Biswajit MANDAL

    (Visva-Bharati University, India)

  • Labani Roy CHAKRABORTY

    (Visva-Bharati University, India)

  • Alapan SANYAL

    (Visva-Bharati University, India)

Abstract

We build an optimization model to decipher the effects of digitalization in trading or marketing. The basic model uses Cobb -Douglas production function to argue that a shift from offline to online may induce increase in profit and subsequent economic growth. The factor-intensity of trading has a role in this context. Additionally, night time utilization due to digitalization further strengthens our results. The extended model with a CES production function gives similar results. However, revenue and cost implications are not same in these two cases. Nevertheless, the essence of the basic results holds true even in a more generalized case.

Suggested Citation

  • Biswajit MANDAL & Labani Roy CHAKRABORTY & Alapan SANYAL, 2024. "A simple model of online marketing, production, profit and growth," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(4(641), W), pages 53-66, Winter.
    • Handle: RePEc:agr:journl:v:xxxi:y:2024:i:4(641):p:53-66
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