Spatial Advertisement Competition: Based on Game Theory | Zendy

Zhengxun Tan | Zendy

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Spatial Advertisement Competition: Based on Game Theory

Author(s) -

Zhengxun Tan

Publication year - 2014

Publication title -

journal of applied mathematics

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.307

H-Index - 43

eISSN - 1687-0042

pISSN - 1110-757X

DOI - 10.1155/2014/216193

Subject(s) - duopoly , advertising , competition (biology) , revenue , business , investment (military) , microeconomics , economics , politics , political science , law , biology , ecology , accounting , cournot competition

Since advertisement is an important strategy of firms to improve market share, this paper highlights duopoly advertisement under the Hotelling model. A model of advertisement under spatial duopoly is established, and corresponding effects of brand values and transportation costs are all captured. This study presents the proportion of sales revenue spending on advertisement. The condition for free-rider in advertisement investment is discussed. Under firms with the identical brand values, if firms' advertisement points to corresponding consumers, price and advertisement investment are all reduced. Therefore, advertisement is discussed under spatial competition in this work

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