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When Does Lag Structure Really Matter in Optimizing Advertising Expenditures?

Author

Listed:
  • Wesley A. Magat

    (Fuqua School of Business, Duke University, Durham, North Carolina 27706)

  • John M. McCann

    (Fuqua School of Business, Duke University, Durham, North Carolina 27706)

  • Richard C. Morey

    (Fuqua School of Business, Duke University, Durham, North Carolina 27706)

Abstract

A paper by Bultez and Naert in the May 1979 issue of Management Science tentatively concludes that profits are relatively insensitive to misspecification of the lag structure of advertising. We examine the conditions under which a firm's profits are most likely to be sensitive to the misspecification of the lag structure. Our analysis indicates how this sensitivity is related to (a) the form of the true lag structure, (b) the demand function, (c) the cost function, and (d) the firm's discount rate.

Suggested Citation

  • Wesley A. Magat & John M. McCann & Richard C. Morey, 1986. "When Does Lag Structure Really Matter in Optimizing Advertising Expenditures?," Management Science, INFORMS, vol. 32(2), pages 182-193, February.
    • Handle: RePEc:inm:ormnsc:v:32:y:1986:i:2:p:182-193
    DOI: 10.1287/mnsc.32.2.182
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    Cited by:

    1. Karen Gedenk & Henrik Sattler, 1997. "Preisschwellen und Deckungsbeitrag - Verschenkt der Handel große Potentiale?," Working Paper Series A 1997-04, Friedrich Schiller University of Jena, School of of Economics and Business Administration.
    2. Grewal, Rajdeep & Mills, Jeffrey A. & Mehta, Raj & Mujumdar, Sudesh, 2001. "Using cointegration analysis for modeling marketing interactions in dynamic environments: methodological issues and an empirical illustration," Journal of Business Research, Elsevier, vol. 51(2), pages 127-144, February.
    3. Karen Gedenk & Henrik Sattler, 1999. "Preisschwellen und Deckungsbeitrag — Verschenkt der Handel gro Potentiale?," Schmalenbach Journal of Business Research, Springer, vol. 51(1), pages 33-59, January.

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