A Dynamic Oligopoly Marketing Model of Advertising

Lihong Shi; Ovanes Petrosian

Authors

Lihong Shi Saint Petersburg State University
Ovanes Petrosian Saint Petersburg State University

Abstract

We consider a dynamic oligopoly advertising model for both noncooperative and cooperative setting. Feedback Nash equilibrium strategies and cooperative strategies are found to determine the optimal advertising efforts of each firm for both setting respectively. Besides, depending upon the cooperative strategies, imputation is introduced as an optimal allocation of joint payoff and Imputation Distribution Procedure is used to guarantee the time consistency for cooperation.

Keywords:

Advertising competition, Optimal control, Dynamic programming, Time consistency

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