TY - JOUR
T1 - Differential game approach to pricing and advertising decisions
AU - Amoozad Mahdiraji, Hannan
AU - Hatami-Marbini, Adel
AU - Moazed, Niloofar Mohammadi
AU - Ansari, Manouchehr
AU - Abbasi Kamardi, Ali Asghar
N1 - Publisher Copyright:
© 2021 Elsevier B.V.
PY - 2021/9/1
Y1 - 2021/9/1
N2 - This study proposes a model to make concurrent decisions on dynamic pricing and advertising to maximise firms' profitability over an infinite time horizon in a duopoly market. To this end, the Nerlove-Arrow pricing and advertising model is designed in the presence of shifting costs in a dynamic duopolistic competition as a differential game. The Nash equilibrium solution is defined based upon a set of Hamilton–Jacobi–Bellman. Four scenarios are applied for economic interpretations and the efficacy of the model.
AB - This study proposes a model to make concurrent decisions on dynamic pricing and advertising to maximise firms' profitability over an infinite time horizon in a duopoly market. To this end, the Nerlove-Arrow pricing and advertising model is designed in the presence of shifting costs in a dynamic duopolistic competition as a differential game. The Nash equilibrium solution is defined based upon a set of Hamilton–Jacobi–Bellman. Four scenarios are applied for economic interpretations and the efficacy of the model.
KW - Differential game
KW - Duopoly market
KW - Dynamic advertising
KW - Dynamic pricing
KW - Shift costs
UR - http://www.scopus.com/inward/record.url?scp=85111281638&partnerID=8YFLogxK
U2 - 10.1016/j.orl.2021.07.002
DO - 10.1016/j.orl.2021.07.002
M3 - Article
AN - SCOPUS:85111281638
VL - 49
SP - 688
EP - 695
JO - Operations Research Letters
JF - Operations Research Letters
SN - 0167-6377
IS - 5
ER -