Allocating marketing resources over social networks: A long-term analysis

Vineeth S. Varma, Samson Lasaulce, Julien Mounthanyvong and Irinel-Constantin Morarescu

Papers from arXiv.org

Abstract: In this paper, we consider a network of consumers who are under the combined influence of their neighbors and external influencing entities (the marketers). The consumers' opinion follows a hybrid dynamics whose opinion jumps are due to the marketing campaigns. By using the relevant static game model proposed recently in [1], we prove that although the marketers are in competition and therefore create tension in the network, the network reaches a consensus. Exploiting this key result, we propose a coopetition marketing strategy which combines the one-shot Nash equilibrium actions and a policy of no advertising. Under reasonable sufficient conditions, it is proved that the proposed coopetition strategy profile Pareto-dominates the one-shot Nash equilibrium strategy. This is a very encouraging result to tackle the much more challenging problem of designing Pareto-optimal and equilibrium strategies for the considered dynamical marketing game.

Date: 2020-11
New Economics Papers: this item is included in nep-gth and nep-net
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