A Lanchester-Type Dynamic Game of Advertising and Pricing

Steffen Jørgensen () and Simon Sigué ()
Additional contact information
Steffen Jørgensen: University of Southern Denmark
Simon Sigué: Athabasca University

A chapter in Games in Management Science, 2020, pp 1-14 from Springer

Abstract: Abstract The paper studies a differential game played by two competing firms over a finite time horizon. As the game progresses, the firms observe the position of the game, i.e., the current time and the current market shares. Each firm uses pricing and advertising in order to influence market shares. We suggest a generalization of the Lanchester market share dynamics such that the rates at which firms attract market share from each other are determined not only by their advertising efforts but also by the consumer prices charged in the market. A full characterization of Nash equilibrium price and advertising strategies is obtained.

Keywords: Price and advertising competition; Duopoly; Differential game; Markovian Nash equilibrium (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (1)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:isochp:978-3-030-19107-8_1

Ordering information: This item can be ordered from
http://www.springer.com/9783030191078

DOI: 10.1007/978-3-030-19107-8_1

Access Statistics for this chapter

More chapters in International Series in Operations Research & Management Science from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().