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Note: Dynamic Conjectural Variations in a Lanchester Oligopoly

Author

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  • Gary M. Erickson

    (Marketing and International Business, School of Business, University of Washington, Seattle, Washington 98195-3200)

Abstract

An approach based on dynamic conjectural variations is advanced for developing dynamic advertising strategies in a Lanchester oligopoly differential game. The approach allows competitors to anticipate rival reactions to market-share state variables, and maintains the computational advantage of open-loop Nash equilibrium strategies. In an empirical application to the ready-to-eat cereal industry, it is shown that advertising strategies based on dynamic conjectural variations can better explain the advertising of the cereal competitors than can open- loop advertising strategies.

Suggested Citation

  • Gary M. Erickson, 1997. "Note: Dynamic Conjectural Variations in a Lanchester Oligopoly," Management Science, INFORMS, vol. 43(11), pages 1603-1608, November.
    • Handle: RePEc:inm:ormnsc:v:43:y:1997:i:11:p:1603-1608
    DOI: 10.1287/mnsc.43.11.1603
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    Citations

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    Cited by:

    1. Mesak, Hani I. & Bari, Abdullahel & Blackstock, Rob, 2016. "On the robustness and strategic implications of a parsimonious advertising – inventory competitive model with extensions to pricing competition," International Journal of Production Economics, Elsevier, vol. 180(C), pages 38-47.
    2. Lim, Lewis K.S., 2013. "Mapping competitive prediction capability: Construct conceptualization and performance payoffs," Journal of Business Research, Elsevier, vol. 66(9), pages 1576-1586.
    3. Ramla Jarrar & Guiomar Martín-Herrán & Georges Zaccour, 2004. "Markov Perfect Equilibrium Advertising Strategies of Lanchester Duopoly Model: A Technical Note," Management Science, INFORMS, vol. 50(7), pages 995-1000, July.
    4. Matthew Spiegel & Heather Tookes, 2008. "Dynamic Competition, Innovation and Strategic Financing," Yale School of Management Working Papers amz2500, Yale School of Management.
    5. Richards, Timothy J. & Patterson, Paul M., 2002. "Strategic Interaction With Multiple Tools: A New Empirical Model," Working Papers 28545, Arizona State University, Morrison School of Agribusiness and Resource Management.
    6. Martín-Herrán, Guiomar & McQuitty, Shaun & Sigué, Simon Pierre, 2012. "Offensive versus defensive marketing: What is the optimal spending allocation?," International Journal of Research in Marketing, Elsevier, vol. 29(2), pages 210-219.
    7. Yanwu Yang & Baozhu Feng & Joni Salminen & Bernard J. Jansen, 2022. "Optimal advertising for a generalized Vidale–Wolfe response model," Electronic Commerce Research, Springer, vol. 22(4), pages 1275-1305, December.
    8. Jim Y. Jin & Osiris J. Parcero, 2010. "Asymmetric Duopoly under Different Market Structures," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 9(1), pages 45-56, April.
    9. González, Eduardo & Villena, Marcelo, 2011. "Spatial Lanchester models," European Journal of Operational Research, Elsevier, vol. 210(3), pages 706-715, May.
    10. Dengpan Liu & Subodha Kumar & Vijay S. Mookerjee, 2012. "Advertising Strategies in Electronic Retailing: A Differential Games Approach," Information Systems Research, INFORMS, vol. 23(3-part-2), pages 903-917, September.
    11. Yungho Weng & Chih-Ming Hung, 2020. "Tariff escalation and de-escalation: the role of market structure," The Japanese Economic Review, Springer, vol. 71(2), pages 233-246, April.
    12. Mesak, Hani I. & Bari, Abdullahel & Luehlfing, Michael S. & Han, Fei, 2015. "On modeling the advertising-operations interface under asymmetric competition," European Journal of Operational Research, Elsevier, vol. 240(1), pages 278-291.
    13. Nobuhiko Terui & Masataka Ban & Greg M. Allenby, 2011. "The Effect of Media Advertising on Brand Consideration and Choice," Marketing Science, INFORMS, vol. 30(1), pages 74-91, 01-02.
    14. Marcus Kunter & Daniel Guhl, 2010. "Die Vorteilhaftigkeit handelsgerichteter Konditionen eines Herstellers - Ein spieltheoretischer Untersuchungsansatz," Schmalenbach Journal of Business Research, Springer, vol. 62(7), pages 744-769, November.
    15. Richards, Timothy J. & Patterson, Paul M., 2006. "Firm-Level Competition in Price and Variety," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 38(3), pages 1-22, December.
    16. Huang, Jian & Leng, Mingming & Liang, Liping, 2012. "Recent developments in dynamic advertising research," European Journal of Operational Research, Elsevier, vol. 220(3), pages 591-609.
    17. Matthew Spiegel & Heather Tookes, 2008. "Dynamic Competition, Innovation and Strategic Financing," Yale School of Management Working Papers amz2500, Yale School of Management.
    18. Tridib Bandyopadhyay & Dengpan Liu & Vijay S. Mookerjee & Allen W. Wilhite, 2014. "Dynamic competition in IT security: A differential games approach," Information Systems Frontiers, Springer, vol. 16(4), pages 643-661, September.
    19. Richards, Timothy J., 2002. "Dynamic Strategic Interaction: A Synthesis Of Modeling Methods," Western Economics Forum, Western Agricultural Economics Association, vol. 1(1), pages 1-5.

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