Note: Dynamic Conjectural Variations in a Lanchester Oligopoly

Gary M. Erickson
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Gary M. Erickson: Marketing and International Business, School of Business, University of Washington, Seattle, Washington 98195-3200

Management Science, 1997, vol. 43, issue 11, 1603-1608

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.

Keywords: marketing; advertising; competitive strategy; games; differential; noncooperative (search for similar items in EconPapers)
Date: 1997
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Citations: View citations in EconPapers (19)

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