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Advertising Expenditures in Coupled Markets-- A Game-Theory Approach

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  • Melvin F. Shakun

    (Rutgers--The State University, New Brunswick, New Jersey)

Abstract

A game-theory approach to advertising expenditures is developed for a situation in which the markets for different products are coupled. By coupling we mean that advertising dollars spent in generating sales for one product have an influence on the sales of another product. Non-cooperative equilibrium solutions are obtained for the case of two competing companies each selling two products in coupled markets. An idealized example might be the case of two automobile manufacturers each of whom sells a low-priced and a high-priced car. Some special cases of the model are developed and extensions indicated.

Suggested Citation

  • Melvin F. Shakun, 1965. "Advertising Expenditures in Coupled Markets-- A Game-Theory Approach," Management Science, INFORMS, vol. 11(4), pages 42-47, February.
    • Handle: RePEc:inm:ormnsc:v:11:y:1965:i:4:p:b42-b47
    DOI: 10.1287/mnsc.11.4.B42
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    Cited by:

    1. Mesak, Hani I. & Calloway, James A., 1995. "A pulsing model of advertising competition: A game theoretic approach, part B -- Empirical application and findings," European Journal of Operational Research, Elsevier, vol. 86(3), pages 422-433, November.

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