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Optimal advertising and pricing for a three‐stage time‐lagged monopolistic diffusion model incorporating income
Author(s) -
Jedidi Kamel,
Eliashberg Jehoshua,
Desarbo Wayne S.
Publication year - 1989
Publication title -
optimal control applications and methods
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.458
H-Index - 44
eISSN - 1099-1514
pISSN - 0143-2087
DOI - 10.1002/oca.4660100403
Subject(s) - monopolistic competition , economics , normative , diffusion , normative model of decision making , econometrics , microeconomics , advertising , mathematical economics , monopoly , business , philosophy , physics , epistemology , thermodynamics
A three‐stage time‐lagged diffusion model that incorporates consumers' income, advertising and price effects is proposed. The derivation of the model synthesizes and relies upon a number of important arguments made in the diffusion and economic literature. Optimal control theory is used to derive normative advertising and pricing strategic implications for a monopolist introducing a new durable product.