Optimal Advertising and Pricing in a New-Product Adoption Model
Journal of Optimization Theory & Applications, Vol. 139, No. 2, pp. 351-360, 2008
10 Pages Posted: 26 Jan 2008 Last revised: 1 May 2014
Date Written: 2008
Abstract
A model of new-product adoption is proposed that incorporates price and advertising effects. An optimal control problem that uses the model as its dynamics is solved explicitly to obtain the optimal price and advertising effort over time. The model has a great potential to be used in obtaining solutions and insights in a variety of differential game settings.
Keywords: new-product adoption model, durable goods model, pricing, advertising, optimal control
JEL Classification: M37, C61, M30
Suggested Citation: Suggested Citation
Sethi, Suresh and Prasad, Ashutosh and He, Xiuli, Optimal Advertising and Pricing in a New-Product Adoption Model (2008). Journal of Optimization Theory & Applications, Vol. 139, No. 2, pp. 351-360, 2008, Available at SSRN: https://ssrn.com/abstract=1087453
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