Dynamic advertising with spillovers: Cartel vs competitive fringe | Zendy

Lambertini Luca | Zendy; Palestini Arsen | Zendy

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Dynamic advertising with spillovers: Cartel vs competitive fringe

Author(s) -

Lambertini Luca,

Palestini Arsen

Publication year - 2009

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.881

Subject(s) - cartel , oligopoly , differential game , collusion , profit (economics) , nash equilibrium , microeconomics , economics , mathematical economics , sequential game , advertising , welfare , repeated game , game theory , mathematics , business , mathematical optimization , cournot competition , market economy

A differential oligopoly game with advertising is investigated, where different dynamics occur between two groups of agents, the former playing a competitive Nash game and the latter cooperating as a cartel. Sufficient conditions for stability and a qualitative analysis of the profit ratio and social welfare at equilibrium are provided. A threshold value for the size of the competitive fringe is pointed out by a suitable numerical simulation. Copyright © 2009 John Wiley & Sons, Ltd.

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