analysis of new product diffusion using a four segment trial repeat model a four segment trial repeat model is developed to model sales of a frequently purchased product in the early stage of the product s life cycle the model can be calibrated using aggregate data alone two versions of the model one emphasizing the competitive aspect of marketing communications and another emphasizing the informative aspect are estimated from data on 21 newly launched pharmaceutical products the model provides valuable diagnostics such as an early estimate of the long run market share of the new product a decomposition of total sales into trial sales due to marketing activities trial sales due to word of mouth and repeat sales the changing composition of the trial market and repeat market over time and the time when the trial market is expected to be saturated in addition the effectiveness of the entrant s marketing efforts word of mouth communication and buyers trial experience are analyzed with the model a cross sectional analysis based on the empirical estimation results of our model reveals interesting insights into product introduction strategies we find that 1 the effectiveness of the firms communication activities on trial is related mainly to product quality attributes and market growth whereas that of word of mouth is associated with product class characteristics and market competitiveness and 2 the effect of product trial on repeat purchases is related mainly to product quality attributes and various market characteristics such as size growth competitiveness and familiarity

a special case of dynamic pricing policy this article studies the implications of experience curves and brand loyalty for optimal dynamic pricing policy in a continuous time model we synthesize several results from the literature on open loop equilibria specifically we show that prices should decrease over time for high discount rates and steeper exogenous declines in variable costs conversely the prices should increase over time if experience curves affect fixed costs and if consumers are brand loyal

optimal dynamic marketing mix policies for frequently purchased products and services versus consumer durable goods a generalized analytic approach abstract this paper deals with the qualitative characterization of optimal pricing and advertising policies together with the optimal ratio of the advertising elasticity of demand to its price elasticity over time the problem is studied for frequently purchased products and services fps as well as consumer durable goods cdg in both monopolistic and duopolistic markets demand dynamics cost learning and discounting of future profits are taken into consideration in addition both the open loop and feedback methodologies are pursued to characterize and compare the derived optimal policies the paper uses an analytical approach to characterize the optimal dynamic policies in a general setting as is mathematically tractable followed by the analysis of more specific models to gain additional managerial insights while maintaining a certain degree of generality optimal fps marketing mix policies are shown to be different from their cdg counterparts for both monopolistic and duopolistic markets while the ratio of advertising elasticity to price elasticity appears to have been governed by similar set of rules for fps and cdg the direction of change of such ratio over time looks different from each other managerial implications and directions for future research are also discussed

dynamic pricing of perishable assets under competition we study dynamic price competition in an oligopolistic market with a mix of substitutable and complementary perishable assets each firm has a fixed initial stock of items and competes in setting prices to sell them over a finite sales horizon customers sequentially arrive at the market make a purchase choice and then leave immediately with some likelihood of no purchase the purchase likelihood depends on the time of purchase product attributes and current prices the demand structure includes time variant linear and multinomial logit demand models as special cases assuming deterministic customer arrival rates we show that any equilibrium strategy has a simple structure involving a finite set of shadow prices measuring capacity externalities that firms exert on each other equilibrium prices can be solved from a one shot price competition game under the current time demand structure taking into account capacity externalities through the time invariant shadow prices the former reflects the transient demand side at every moment and the latter captures the aggregate supply constraints over the sales horizon this simple structure sheds light on dynamic revenue management problems under competition which helps capture the essence of the problems under demand uncertainty we show that the equilibrium solutions from the deterministic game provide precommitted and contingent heuristic policies that are asymptotic equilibria for its stochastic counterpart when demand and supply are sufficiently large this paper was accepted by yossi aviv operations management

competitive pricing by a price leader we examine the problem of pricing in a market where one brand acts as a price leader we develop a procedure to estimate a leader s price rule which is optimal given a sales target objective and allows for the inclusion of demand forecasts we illustrate our estimation procedure by calibrating this optimal price rule for both the leader and the follower using data on past sales and prices from the mid size sedan segment of the u s automobile market our results suggest that a leader follower system stackelberg seems more consistent with the pricing behavior in this market than a mutually independent pricing rule nash we also find that our optimal price rule explains this market data better than other pricing schemes that do not account for optimizing behavior on the part of the leader and the follower

pricing and lot sizing polices for perishable goods when the demand depends on selling price displayed stocks and expiration date abstract price is a major factor on the demand based on marketing and economic theory in addition the demand for perishable products also depends on its freshness moreover it is a well known fact that increasing stock display e g fresh fruits vegetables baked goods may encourage consumers to purchase more this paper first proposes an inventory model that stipulates the demand explicitly in a multivariate function of price freshness and displayed stocks it may be profitable to have a closeout sale at a markdown price and always keep on hand displayed stocks fresh and plentiful if the demand is freshness and stock dependent hence the traditional assumption of zero ending inventories is relaxed to a non zero ending inventory as a result the objective is to determine three decision variables i e unit price cycle time and ending inventory level in order to maximize the total profit then it is demonstrated that the total profit is strictly pseudo concave in those three decision variables which reduces the search for solutions to a unique local maximum finally numerical examples to illustrate the theoretical results and to highlight managerial insights are presented

mass migrations income inequality and ecosystems health in the second wave of a globalization abstract this paper compares conditions for intercontinental migrations during the first and the second globalization waves and proposes a system model describing basic relationships between migrations income inequality economic growth and environment the model suggests that in a situation where a strong asymmetry in economic power and wealth dominates global economic and political relations further trade and migration liberalization may have predominantly negative impact on southern natural systems while solving little or nothing of the poverty problems in the north uncontrolled immigration may in the long run produce economic social and probably ethnic tensions which costs could by far exceed the medium term benefits rejuvenation of active population and reduction in the strain imposed on the pension system

optimal strategies for general price quality decision models of new products with learning production costs abstract the question of product quality permeates every level of business and is becoming crucial for the survival of modern manufacturing firms in automotive and high tech industries in this paper we deal with the optimal price and quality policies for the introduction of a new product on the supply side the firm wants to determine the unit price and quality level over time given that unit cost declines along a learning curve and increases if quality is made greater on the demand side dynamic demand is related to price and quality as well as to cumulative sales which represent diffusion and saturation effects we will model this problem in a general framework that includes several previous results as special cases by applying the maximum principle we will derive the optimal price and quality policies and discover the interactions between these two major strategic marketing instruments and the diffusion process several fundamental theoretical results will be established for the model under certain specified conditions higher prices do imply higher quality and under other conditions the optimal price declines over time while the product quality improves to illustrate these results the theoretical results are applied to two specific cases the first one is a simple nonseparable demand growth function in price and quality the other is a separable demand function of price and quality

dynamic advertising and pricing in an oligopology a nash equilibrium approach a general dynamic oligopolistic price advertising model is formulated and open loop nash solutions are derived as a main result a generalisation of the well known dorfman steiner theorem to heterogenous oligopoly markets is presented furthermore a detailed discussion of long run equilibrium solutions is given for an important special case of the general model formulation it is shown that the optimal advertising policies are constant over time and constitute degenerated feedback solutions

joint stochastic dynamic pricing and advertising with time dependent demand abstract this paper examines the sale of a finite number of items in a class of stochastic dynamic pricing and advertising models with time dependent demand elasticities we prove structural properties of the optimal expected profits with respect to time inventory level price impact advertising impact and different model parameters such as discount rate marginal unit costs and holding costs we find that the value of an additional item opportunity costs is decreasing in the unit costs the discount rate the holding cost rate and the number of items left to sell we also derive structural properties of optimal joint pricing and advertising strategies this way we obtain general qualitative insights in the complex interplay and the mutual dependence of optimal pricing and advertising decisions among other properties we show that a higher advertising impact leads to higher optimal prices and lower advertising rates which in turn implies a lower speed of sale the results obtained help practitioners to respond to changes in market conditions by adjusting price and advertising accordingly our results allow speeding up numerical computations of decisions as the set of possible actions can be reduced significantly our analysis implies general results for pure pricing as well as pure advertising models with time dependent demand elasticities

impact of ownership on the international involvement of smes this paper analyses the relationship between the internationalisation strategies of smes and types of ownership different types of ownership affect firms and this in turn will influence the internationalisation strategy adopted using a sample of spanish smes our results show that internationalisation is negatively related to family ownership and positively related to corporate ownership we have also observed that the presence of a corporate blockholder in family firms encourages internationalisation these results support the idea that ownership type influences the decision to internationalise

a dynamic model of manufacturing quality s effect on optimal advertising and pricing policies abstract this paper deals with the determination of optimal advertising and pricing policies when the influence of manufacturing quality on sales ra considered research to date has focused on the effect of advertising and pricing independently on the sales rate of a product under a variety of product and market conditions these studies have not considered the effect of product quality an important component of competitive strategy we develop a dynamic model to maximize discounted profits over a planning horizon in which sales rate is dependent on price advertising and product quality using standard methods of optimal control theory we characterize qualitatively the nature of optimal advertising quality and pricing policies under a variety of conditions

are group affiliated firms really more profitable than nonaffiliated the role of corporate center in influencing the economic performance of business units has been a central research topic in the industrial organization and strategic management literature a common finding is the limited corporate and business group effects recently an emerging line of studies argues that the market inefficiencies and institutional voids in emerging markets can be overcome more efficiently by large diversified business groups than by non group small firms some empirical evidence also shows that non group small firms are significantly less profitable than group affiliated firms this paper raises this issue by empirically investigating the influence of group affiliation on the return on assets and tobin s q of 340 group affiliated firms versus 423 non group firms in taiwan during the period of 1997 1999 the statistical results show that group affiliation can not always create value for member firms the size of the business group matters when affiliated with the largest business groups member firms indeed show improved stock market performance but when firms are affiliated with small and medium sized groups their accounting performance suffers findings of this paper suggest a threshold effect and a u shape relationship between group affiliation and profitability in emerging economies

modeling multiattribute utility risk and belief dynamics for new consumer durable brand choice this paper proposes a brand choice model to aid in the prelaunch management of a new consumer durable entry in an existing category the model contributes to theory by integrating the critical phenomena of multiattribute preference risk and dynamics in an individual level expected utility framework the integration is based on established theoretical constructs in utility bayesian decision analysis and discrete choice theory measurement and estimation procedures are presented an application is described and the managerial relevance of this work as a planning and forecasting tool is examined

price competition and compatibility in the presence of positive demand externalities in many cases the benefit to a consumer of a product increases with the number of other users of the same product these demand interdependencies are referred to in the literature as positive demand externalities or network externalities this paper examines the dynamic pricing behaviors of an incumbent and a later entrant with special attention to the impacts of demand externalities compatibility and competition on prices and profits defining market power as the ability to price above a competitor without losing market share we show how demand externalities and installed base combine to confer market power we model optimal pricing as a differential game with the optimal price trajectory established as nash open loop controls for a duopoly durable goods market with strong demand externalities the results show an increasing price trajectory can be optimal as expected a new entrant is better off if its products are compatible with those of the incumbent especially when demand externalities are strong and the installed base of the incumbent is large less intuitively the incumbent as well may be better off agreeing on common standards the comparison of monopoly and duopoly shows that under strong demand externalities and a small installed base the incumbent profits from compatible entry

a new product growth for model consumer durables this article originally appeared in management science january 1969 volume 15 number 5 pp 215 227 published by the institute of management sciences a growth model for the timing of initial purchase of new products is developed and tested empirically against data for eleven consumer durables the basic assumption of the model is that the timing of a consumer s initial purchase is related to the number of previous buyers a behavioral rationale for the model is offered in terms of innovative and imitative behavior the model yields good predictions of the sales peak and the timing of the peak when applied to historical data a long range forecast is developed for the sales of color television sets

investigating the sensitivity of equilibrium profits to advertising dynamics and competitive effects the author investigates the validity of the flat maximum principle the insensitivity of a firm s profits to changes in its optimal advertising level in a duopolistic market in which advertising by the two firms has carryover effects two alternative competitive scenarios are examined i in which total industry sales are allowed to vary over time and ii where firms are engaged in market share rivalry for i the open loop nash equilibrium advertising strategies for the firms are derived assuming a specific sales response function and an infinite time horizon a numerical analysis of the sensitivity of firms profit functions to advertising expenditures is performed at different levels of the a discount rate b advertising elasticity and c advertising decay rate an empirical illustration from the pharmaceutical industry is provided special cases of the model formulation are examined analytically in order to highlight the intuition behind the flatness of the maximum and to study the sensitivity of results obtained to choice of equilibrium strategy closed loop vs open loop for the market share game closed loop policies are considered and the flat maximum principle is illustrated in the context of coke pepsi rivalry in the soft drinks market

optimum advertising policy over time for subscriber service innovations in the presence of service cost learning and customers disadoption abstract on the theoretical side this paper characterizes qualitatively optimal advertising policy for new subscriber services a monopolistic market is analyzed first for which customers disadoption discounting of future profits streams and a service cost learning curve are allowed after characterizing the optimal policy for a general diffusion model the results pertaining to a specific diffusion model for which advertising affects the coefficient of innovation that incorporates the disadoption rate are reported the results of the theoretical research show that the advertising policy of the service firm in the presence of customers disadoption could be very different from the same when disadoption is ignored on the empirical side four alternative diffusion models are estimated and their predictive powers using a one step ahead forecasting procedure compared the diffusion data analyzed are related to the canadian cable tv industry empirical research findings suggest that the specific diffusion model considered above is not only of theoretical appeal but also of major empirical relevance the analytical findings of the study are documented in six theoretical propositions for which proofs are provided in a separate appendix the results of a related numerical experiment together with the analytical findings pertaining to the competitive role of advertising are included managerial implications of the study together with directions for future research are also discussed

optimal pricing and advertising in a durable good duopoly abstract this paper analyzes dynamic advertising and pricing policies in a durable good duopoly the proposed infinite horizon model while general enough to capture dynamic price and advertising interactions in a competitive setting also permits closed form solutions we use differential game theory to analyze two different demand specifications linear demand and isoelastic demand for symmetric and asymmetric competitors we find that the optimal price is constant and does not vary with cumulative sales while the optimal advertising is decreasing with cumulative sales comparative statics for the results are presented

vertical cooperative advertising and pricing decisions in a manufacturer retailer supply chain a game theoretic approach abstract manufacturers can increase the advertising expenditures of their retailers by bearing a fraction of the occurring costs within the framework of a vertical cooperative advertising program we expand the existing research which deals with advertising and pricing decisions in a manufacturer retailer supply chain contemporaneously by means of game theory four different relationships between the channel members are considered firstly three non cooperative games with either symmetrical distribution of power or asymmetrical distribution with one player being the leader in each case and one cooperative game where both players tend to maximize the total profit the latter is complemented by a bargaining model which proposes a fair split of profit on the basis of the players risk attitude and bargaining power our main findings are as follows a in contrast to previous analyses we do not limit the ratio between manufacturer s and retailer s margin which provides more general insights into the effects of the underlying distribution of power within the channel b the highest total profit is gained when both players cooperate this behavior puts also the customers in a better position as it produces the lowest retail price as well as the highest advertising expenditures compared to the other configurations

oligopoly models for optimal advertising when production costs obey a learning curve business policy questions frequently involve competitive encounters among several different firms oligopoly theory in economics was devised to answer similar questions but its results so far are largely confined to cases of monopoly one firm duopoly two firms and many firms wheat farmers the cases with n firms where 3 n 10 are of great interest to business policy but are rarely treated in the economics literature because of their extreme difficulty the natural mathematical model for studying such questions is the theory of differential games originally devised by r isaacs isaacs r 1975 differential games robert e krieger publishing co huntington new york originally published by john wiley sons new york 1965 for pursuer evader games later it was extended by j case case j h 1979 economics and the competitive process new york university press new york to nonzero sum differential games for application to questions of economic competition the problem of characterizing an optimal advertising policy over time is an important question in the field of marketing it is especially important during the period of the introduction of a new product and it is also during this time that the production learning curve phenomenon is most pronounced in this paper we study oligopoly models which combine elements of bass s demand growth model bass f m 1969 a new product growth model for consumer durables management sci 15 january 215 227 the vidale wolfe vidale m l h b wolfe 1957 an operations research study of sales response to advertising oper res 5 370 381 and ozga ozga s 1960 imperfect markets through lack of knowledge quart j econom 74 29 52 advertising models with linear or quadratic costs and the production learning curve hirschmann w p 1964 profit from the learning curve harvard bus rev 42 january february 125 139 the boston consulting group 1972 perspectives on experience the boston consulting group boston in the monopoly case n 1 the optimal advertising function is derived by applying green s theorem in the duopoly n 2 and triopoly n 3 cases we use discrete differential game models and find nash equilibrium solutions in each of these models the form of the optimal policy is easy to find but because of the complicated nature of the resulting differential equations closed form solutions for the optimal state and control trajectories are impossible to find hence we use a computer to compute these optimal trajectories and plot them for various parameter settings because 13n parameters must be chosen to define a model with n players a complete search of the parameter space is clearly impossible we content ourselves in this paper with presenting computer plots of four different interesting encounters of the triopoly model our methods can be extended to work just as well for competitive encounters among n players where 1 n 10 we believe that in this paper we have opened up the way to studying oligopoly theory with a small number of participants and under widely varying conditions although the lack of closed form solutions may disappoint some readers we feel that the easy availability of graphical solutions is a more than adequate substitute

what is ecological economics ecological economics addresses the relationships between ecosystems and economic systems in the broadest sense these relationships are the locus of many of our most pressing current problems i e sustainability acid rain global warming species extinction wealth distribution but they are not well covered by any existing discipline environmental and resource economics as it is currently practiced covers only the application of neoclassical economics to environmental and resource problems ecology as it is cur rently practiced sometimes deals with human impacts on ecosystems but the more common tendency is to stick to natural systems ecological economics aims to extend these modest areas of overlap it will include neoclassical environmental economics and ecological impact studies as sub sets but will also encourage new ways of thinking about the linkages between ecological and economic systems we have chosen the name ecological economics for this area of study because it implies a broad ecological interdisciplinary and holistic view of the problem of studying and managing our world the earth from space cover of the journal reflects this global holistic perspective we did not intend to imply with the ordering of the two words in the title that the journal is mainly an economics journal it is intended to be a new approach to both ecology and economics that recognizes the need to make economics more cognizant of ecological impacts and dependencies the need to make ecology more sensitive to economic forces incentives and constraints and the need to treat integrated economic ecologic systems with a common but diverse set of conceptual and analytical tools there was much discussion of other possible names such as economic ecology or ecology and economics or some conjoining of the two words that to me end up being confusing tongue twisters like ecolnomics or econology but ecological economics seemed to get closest to the mean ing we desired while still being evocative to the uninitiated

stochastic dynamic pricing and advertising in isoelastic oligopoly models abstract in this paper we analyze stochastic dynamic pricing and advertising differential games in special oligopoly markets with constant price and advertising elasticity we consider the sale of perishable as well as durable goods and include adoption effects in the demand based on a unique stochastic feedback nash equilibrium we derive closed form solution formulas of the value functions and the optimal feedback policies of all competing firms efficient simulation techniques are used to evaluate optimally controlled sales processes over time this way the evolution of optimal controls as well as the firms profit distributions are analyzed moreover we are able to compare feedback solutions of the stochastic model with its deterministic counterpart we show that the market power of the competing firms is exactly the same as in the deterministic version of the model further we discover two fundamental effects that determine the relation between both models first the volatility in demand results in a decline of expected profits compared to the deterministic model second we find that saturation effects in demand have an opposite character we show that the second effect can be strong enough to either exactly balance or even overcompensate the first one as a result we are able to identify cases in which feedback solutions of the deterministic model provide useful approximations of solutions of the stochastic model

factor substitution in u s manufacturing does plant size matter we use micro data for 10 412 u s manufacturing plants to estimate the degrees of factor substitution by industry and by plant size we find that 1 capital labor energy and materials are substitutes in production and 2 the degrees of substitution among inputs are quite similar across plant sizes in a majority of industries two important implications of these findings are that 1 small plants are typically as flexible as large plants in factor substitution consequently economic policies such energy conservation policies that result in rising energy prices would not cause negative effects on either large or small u s manufacturing plants and 2 since energy and capital are found to be substitutes the 1973 energy crisis is unlikely to be a significant factor contributing to the post 1973 productivity slowdown

dynamics of competing with quality and advertising based goodwill goodwill formation is a complex process and many factors influence the formation of goodwill of a firm the implications of advertising enabled goodwill formation are reported in several articles in the research literature in this paper we extend this stream of research by including quality in the goodwill formation process we adopt a dynamic model of competition utilizing a differential game approach and derive expressions for open loop markovian nash equilibrium investments in advertising and quality the insights gained from the analysis of our model and from the equilibrium solutions are presented in the form of research propositions

concepts of efficiency in ecological economics sisyphus and the decision maker abstract efficiency forms the bedrock of policy planning and business approaches to sustainable development but what do ecological economists mean by efficiency in the resource use context efficiency has a wide range of potential interpretations from the ratio of work output energy inputs to pareto efficiency despite the potential richness of the efficiency concept in practice efficiency is often narrowly conceived within disciplinary boundaries this appears to be the case even in ecological economics which purports to be transdisciplinary and pluralistic such narrow disciplinary perspectives essentially waste the richness of the efficiency concept this wasting could mean ecological economists and decision makers are destined to sisyphean toil in the pursuit of sustainable development this paper explores the efficiency concept and its interpretation it then reviews ecological economic literature to find that there is much room for improvement in the way ecological economists apply efficiency finally the paper presents a framework within which a truly ecological economic approach to efficiency can emerge armed with this framework policy makers and planners should be better prepared to make decisions leading to sustainable development

pricing strategies in a dynamic duopoly a differential game model we formulate a differential game model for dynamic pricing in a duopolistic market firms demand functions are derived from utility maximizing behavior of consumers with the demand for a brand given by the logit model preferences for brands are assumed to evolve over time in the market in a manner akin to learning models postulated in the marketing literature we derive the differential equations governing the equilibrium open loop price paths over time and show that in steady state the brand with the higher preference level charges the higher price the formulation is extended to include the effects of consumer heterogeneity and equilibrium steady state prices are compared with those obtained when heterogeneity is ignored a comparison of steady state dynamic prices with myopic prices is provided an empirical example is discussed to show how steady state model predictions may be obtained from actual longitudinal purchase data

organizational patterns of economies an ecological perspective abstract a complex adaptive systems paradigm can be used to abridge theorizing in ecological and economic sciences the paper discusses economic flows connectivity and stability from the perspective of theoretical ecology the global economy by analogy with ecosystems appears to self organize as an ascendent system most of the world trade is done among the tiny fraction of technologically advanced countries and trade interaction strength exhibits a power law with exponential decay small world behavior and preferential attachment characterizes interactions among economic agents industrial economies and the world economic system as a whole appear to evolve towards the maximum power efficiency development that fosters efficiency in the maximum power sense all the world becomes industrialized implies a trade off in socio economic diversity and may be antithetical to the stability of the global economy if we take an ecological perspective then the problem of global development does not reside in the realm of technology or global governance it boils down to the question of required natural balance in living systems the balance between organized complexity and overhead the harmony between efficiency and adaptability

competitive advertising strategies and market size dynamics a research note on theory and evidence this paper analyzes competing firms advertising strategies in markets characterized by dynamic market sizes for new product innovations a large literature has been developed on the basis of the celebrated bass diffusion process which captures what we call market size dynamics however in spite of the significant literature incorporating competitiveness into the bass model few if any analytical results have been obtained especially those with normative implications on the other hand important theoretical and empirical insights have recently been obtained using the famous lanchester warfare model of competition in which market share dynamics are governed by advertising activities for mature products whose market sizes are typically fixed or stable our paper seeks to address the issue of optimal advertising strategies incorporating both market share dynamics and market size dynamics in doing so we seek to take advantage of the theoretical and normative insights currently available in the lanchester formulation for mature products to obtain normative analytical results on competitive advertising strategies for new product innovations whose markets evolve around the bass process we first obtain analytical solutions to the problem at hand and offer theoretical implications for competitive advertising on the bass diffusion model the models parameters are then estimated using a set of data on sales and advertising expenditures of polaroid corp and eastman kodak co in instant photography during the 19761985 period optimal trajectories for the firms advertising spending are then calculated and other marketing and managerial implications of optimal advertising strategies are explored

optimal order quantity and selling price over a product life cycle with deterioration rate linked to expiration date it is evident that the lower the price the higher the demand therefore price is an important factor in a consumer s purchasing decision additionally for today s health conscious consumers product freshness is another important factor in purchasing decisions since product freshness declines over time today s health conscious consumers prefer a perishable product with a longer sell by date to a shorter one moreover a product s demand rate moving through its life cycle can be approximately represented by a trapezoid type pattern which includes constant demand increasing demand and decreasing demand as special cases in existing literature several researchers have developed inventory models for trapezoidal demand however they failed to consider pricing strategy product freshness linked to expiration date and purchasing cost in this study we enhance previous models by 1 taking pricing into consideration 2 exploring deterioration rate linked to expiration date and 3 adding an appropriate non constant purchasing cost we then derive theoretical results and run numerical examples to obtain managerial insights for instance the total profit without purchasing cost is significantly lower than that with purchasing cost included also if the cost of lost sales is improperly low then the total profit may become negative due to a large amount of lost sales

dynamic duopolistic competition with sticky prices the authors study duopolistic competition in a homogeneous good through time under the assumption that its current desirability is an exponentially weighted function of accumulated past consumption this implies that the current price of the good does not decline by as much to accommodate any given level of current consumption our an alysis is conducted in terms of a differential game it is found that the equilibrium price corresponding to the open loop nash equilibriu m strategies approaches the static cournot equilibrium price while th e equilibrium price corresponding to the closed loop nash equilibrium strategies which are subgame perfect approaches a price below it copyright 1987 by the econometric society

determinants of the internationalization of regions the role and effectiveness of public policy measures banno m piscitello l and varum c determinants of the internationalization of regions the role and effectiveness of public policy measures regional studies this paper assesses the role of public policy measures on outward internationalization of regions by including financial and non financial incentives among the determinants of the international competitiveness of regions it is found that the former are important to enhance their active internationalization but that variables related to the knowledge and competence base of regions are even more so financial incentives related to equity participation as well as non financial incentives related to the provision of information come out highly significant in stimulating outward internationalization the empirical analysis is conducted for the twenty italian nuts 2 regions over the period 2003 2008

an analytical framework for retailer price and advertising decisions for products with temperature sensitive demand abstractthe demand for weather sensitive products such as beverages ice creams or chocolate varies with changes in temperature yet retailers lack a framework to adapt the marketing mix element

dynamics of pricing in the video game console market skimming or penetration abstract nintendo lost its dominant position in the video game industry during the console war between its nintendo 64 and sony s playstation however nintendo could have made several different strategic decisions to change the outcome this article develops a structural model and investigates these alternative strategies through policy simulations in particular the author provides a framework to study firms optimal pricing strategies under network effects consumer heterogeneity and oligopolistic competition consumer heterogeneity provides an incentive for a durable goods manufacturer to price skim while network effects lead to an opposite motive for penetration pricing the proposed framework incorporates these two competing motives under oligopolistic competition the author estimates a demand system that allows for indirect network effects and consumer heterogeneity and then numerically solves for the markov perfect equilibrium in firms dynamic pricing game policy simulations indicate that ni

coordinating advertising and pricing in a manufacturer retailer channel abstract cooperative advertising is a practice that a manufacturer pays retailers a portion of the local advertising cost in order to induce sales cooperative advertising plays a significant role in marketing programs of channel members nevertheless most studies to date on cooperative advertising have assumed that the market demand is only influenced by advertising expenditures but not by retail price this paper addresses channel coordination by seeking optimal cooperative advertising strategies and equilibrium pricing in a two member distribution channel we establish and compare two models a non cooperative leader follower game and a cooperative game we develop propositions and insights from the comparison of these models the cooperative model achieves better coordination by generating higher channel wide profits than the non cooperative model with these features a the retailer price is lower to consumers and b the advertising efforts are higher for all channel members we identify the feasible solutions to a bargaining problem where the channel members can determine how to divide the extra profits

dynamic pricing and advertising of perishable products with inventory holding costs abstract we examine a special class of dynamic pricing and advertising models for the sale of perishable goods including marginal unit costs and inventory holding costs the time horizon is assumed to be finite and we allow several model parameters to be dependent on time for the stochastic version of the model we derive closed form expressions of the value function as well as of the optimal pricing and advertising policy in feedback form moreover we show that for small unit shares the model converges to a deterministic version of the problem whose explicit solution is characterized by an overage and an underage case we quantify the close relationship between the open loop solution of the deterministic model and the expected evolution of optimally controlled stochastic sales processes for both models we derive sensitivity results we find that in the case of positive holding costs on average optimal prices increase in time and advertising rates decrease furthermore we analytically verify the excellent quality of optimal feedback policies of deterministic models applied in stochastic models

the dynamic pricing of next generation consumer durables learning curve effects aspects of consumer demand models e g reservation price distributions intertemporal utility maximizing behavior and competitive activity are reasons which have been offered to explain why prices of new durables decline over time this paper presents an alternative rationale based on the buying behavior for products with overlapping replacement cycles i e next generation products a model for consumer sales of a new durable is developed by incorporating the replacement behavior of a previous generation product pricing strategies for two product generations are investigated analytically and with numerical methods results indicate that durable replacement behavior leads to a wider set of optimal pricing strategies than previously obtained several empirical illustrations of industry pricing practices for successive product generations are also shown to be consistent with the theoretical results finally various areas for future research are outlined

analytical models of competition with implications for marketing issues findings and outlook the authors review a representative cross section of analytical models of competition using a framework for competitive analysis developed from a marketing perspective models are classified by the

a diffusion model incorporating product benefits price income and information we start by assuming that a major benefit of many new durable products such as dishwashers and microwave ovens is time savings others such as vcrs also enhance the value of our leisure time using a household production framework we demonstrate that a utility maximizing individual will have a reservation price for the product which is a function of the product benefits and his wage rate by assuming that the wage rate has an extreme value distribution across the population we are able to derive for the aggregate process an income price dependent logistic adoption equation we then allow for the possibility that certain eligible consumers may delay their purchase of the product because they are unaware that it exists are suspicious of its quality or expect its price to fall unawareness uncertainty and hope for further price declines are assumed to decrease with the increase in the number of previous adopters the resulting diffusion model has the property that the product life cycle phenomenon can be explained jointly or separately by the income price process and the awareness uncertainty expectations process using data on household income on durable penetration within different income classes and on first purchase sales the aggregate diffusion model and its premises are tested and supported it is found that both the income price and awareness uncertainty expectations processes are at work however the dependence of the awareness uncertainty expectations delay process on the number of previous adopters e g word of mouth type effect exists only in certain product categories and is usually relatively weak it is demonstrated that if the word of mouth type effects are weak a price skimming strategy is optimal for a monopolist and also is likely to be implemented by oligopolists the sales forecasting implications of the model also are pursued

personalized pricing and advertising an asymmetric equilibrium analysis we study personalized price competition with costly advertising among n quality cost differentiated firms strategies involve mixing over both prices and whether to advertise in equilibrium only the top two firms advertise earning bertrand like profits welfare losses initially rise then fall with the ad cost with losses due to excessive advertising and sales by the wrong firm when firms are symmetric the symmetric equilibrium yields perverse comparative statics and is unstable our key results apply when demand is elastic when ad costs are heterogeneous and with noise in consumer tastes

productivity market selection and corporate growth comparative evidence across us and europe this paper analyses the patterns of market selection in manufacturing industries of france germany uk and usa we first disentangle the contribution to industry level productivity growth of within firm productivity changes and between firm reallocation of shares the evidence corroborates the notion that within firm learning prevails over market selection forces with larger firms driving such innovation and learning processes second we address the strength of selection by exploring to what extent firm growth rates are shaped by relative productivity levels as compared to variation thereof our key finding is that although changes in relative efficiency have a greater impact on growth than relative efficiency levels there is an overall weak relationship between productivity and growth and therefore a weak power of selection forces in all countries the results hold across firms of different size but we also find that selection bites more on smes

planning marketing mix strategies in the presence of interaction effects companies spend millions of dollars on advertising to boost a brand s image and simultaneously spend millions of dollars on promotion that many believe calls attention to price and erodes brand equity we believe this paradoxical situation exists because both advertising and promotion are necessary to compete effectively in dynamic markets consequently brand managers need to account for interactions between marketing activities and interactions among competing brands by recognizing interaction effects between activities managers can consider interactivity trade offs in planning the marketing mix strategies on the other hand by recognizing interactions with competitors managers can incorporate strategic foresight in their planning which requires them to look forward and reason backward in making optimal decisions looking forward means that each brand manager anticipates how other competing brands are likely to make future decisions and then by reasoning backward deduces one s own optimal decisions in response to the best decisions to be made by all other brands the joint consideration of interaction effects and strategic foresight in planning marketing mix strategies is a challenging and unsolved marketing problem which motivates this paper this paper investigates the problem of planning marketing mix in dynamic competitive markets we extend the lanchester model by incorporating interaction effects constructing the marketing mix algorithm that yields marketing mix plans with strategic foresight and developing the continuous discrete estimation method to calibrate dynamic models of oligopoly using market data both the marketing mix algorithm and the estimation method are general so they can be applied to any other alternative model specifications for dynamic oligopoly markets thus this dual methodology augments the decision making toolkit of managers empowering them to tackle realistic marketing problems in dynamic oligopoly markets we illustrate the application of this dual methodology by studying the dynamic lanchester competition across five brands in the detergents market where each brand uses advertising and promotion to influence its own market share and the shares of competing brands empirically we find that advertising and promotion not only affect the brand shares own and competitors but also exert interaction effects i e each activity amplifies or attenuates the effectiveness of the other activity normatively we find that large brands underadvertise and overspend on promotion while small brands underadvertise and underpromote finally comparative statics reveal managerial insights into how a specific brand should respond optimally to the changes in a competing brand s situation more generally we find evidence that competitive responsiveness is asymmetric

optimal advertising policies for diffusion models of new product innovation in monopolistic situations this paper deals with the determination of optimal advertising strategies for new product diffusion models we consider the introduction of a new consumer durable in a monopolistic market and the evolution of sales is modelled by a flexible diffusion model repeat sales and possible entry of rivals are disregarded but we allow for discounting of future revenue streams and cost learning curve using standard methods of optimal control theory we characterize qualitatively the structure of an optimal advertising strategy for different versions of the diffusion model

small and medium sized enterprises technology and globalization introduction to a special issue on small and medium sized enterprises in the global economy this paper is an introduction to the special issue on small and medium sized enterprises in the global economy the paper gives a broad outline of globalization the role of technology and examines the role that small and medium sized enterprises play in the global economy we focus on foreign direct investment of small technology based firms and how their innovations diffuse into the global economy

the impact of competitive entry in a developing market upon dynamic pricing strategies this paper analyzes dynamic pricing strategies for new durable goods in a two period context the first period is characterized as a monopoly market structure for a new product having dynamic demand the second period begins when a new firm enters the market and thereby changes the market structure to a duopolistic one we begin by analyzing the pricing strategies of three types of monopolists nonmyopic myopic and surprised a nonmyopic monopolist is a first entrant who perfectly predicts the competitive entry a myopic monopolist totally discounts the duopolistic period and a surprised monopolist is a first entrant who has the longer time horizon of the nonmyopic monopolist but who does not foresee the competitive entry our results indicate that the nature of these pricing strategies may be quite different it is optimal for the nonmyopic firm to price its product at a higher level than the myopic monopolist additional results indicate under what circumstances the surprised monopolist will p

trade and access to finance of smes is there a nexus limited resources and barriers to entry are critically higher for small and medium enterprises smes than for large companies one of the reasons explaining why the resources of smes are scarce is their limited access to financial services this in turn reduces the likelihood of exporting for this reason using the census of smes done by the central bank of egypt and the egyptian banking institute we try to examine the impact of access to finance on their export performance we measure the latter by the extensive margin that means the probability of becoming an exporter and the probability of serving several markets we found a significant and positive impact of dealing with banks and having banking facilities on the probability of exporting and that of exporting to more than one destination thus wider and more efficient financial services are likely to increase the number of exporters and boost exports diversification

a game theoretic approach to coordinate pricing and vertical co op advertising in manufacturer retailer supply chains vertical cooperative co op advertising is a marketing strategy in which the retailer runs local advertising and the manufacturer pays for a portion of its entire costs this paper considers vertical co op advertising along with pricing decisions in a supply chain this consists of one manufacturer and one retailer where demand is influenced by both price and advertisement four game theoretic models are established in order to study the effect of supply chain power balance on the optimal decisions of supply chain members comparisons and insights are developed these embrace three non cooperative games including nash stackelberg manufacturer and stackelberg retailer and one cooperative game in the latter case both the manufacturer and the retailer reach the highest profit level subsequently the feasibility of bargaining game is discussed in a bid to determine a scheme to share the extra joint profit

optimal pricing strategies for new products in dynamic oligopolies this paper deals with the determination of optimal pricing policies for firms in oligopolistic markets the problem is studied as a differential game and optimal pricing policies are established as nash open loop controls cost learning effects are assumed such that unit costs are decreasing with cumulative output discounting of future profits is also taken into consideration initially the problem is addressed in a general framework and we proceed to study some specific cases that are related to models presented in recent literature three basic classes of sales dynamics are analyzed competition with price effects only competition with price as well as adoption effects and competition with adoption effects only in some cases it turns out that results which hold for the monopoly case carry over to the multi firm case in the sense that the qualitative structure of optimal pricing strategies is the same in the monopoly and the oligopoly cases however due to competitive interdependencies differences certainly exist in the levels as well as the rates of change of optimal prices

quantifying the relationship of resilience and eco efficiency in complex adaptive energy systems the concepts of efficiency and resilience are important in complex adaptive systems efficiency and resilience have been compared in complex systems but the data and materials have mainly been derived from natural ecosystems the actual environmental impacts of this comparison with data and materials from human economic systems is an important research theme for ecological economics furthermore efficiency defined as eco efficiency is missing from resilience research this paper studies resilience and eco efficiency in societal energy systems eco efficiency is defined as energy produced per co2 emissions and incineration ash generated for resilience we use the diversity of fuel types in energy systems in particular the evenness of fuels in each fuel type category empirical materials from the district heating energy system of southern lapland in finland encompassing six municipalities are presented what if scenarios show that in general diversity and eco efficiency seem to support each other i e there is a correlation this is different from food web studies in ecology where the material flows are primarily biomass in human energy systems lithosphere derived materials are used alongside biomass in our case study fossil coal oil as well as peat which is a semi fossil fuel the difference might also be explained due to the role of technology in human economic systems for policy and business strategy implications it is important to study the case system with two interdependent system boundaries the subsystem level of the capital city rovaniemi and the larger six municipality regional system to which rovaniemi belongs policy planning and business strategy development would gain if the actors involved would approach the system with enlarged spatial and temporal system boundaries long term strategic thinking and inter municipality cooperation may help the region to mitigate the risks related to the development of the district heating energy system

evolutionary policies for sustainable development adaptive flexibility and risk minimising abstract an evolutionary perspective on policies to foster sustainable development is presented it is argued that policies suggested by the traditional economic theory of environmental policy can stimulate unsustainable socio economic structures and patterns in addition they are unable to remove undesired locked in systems and technologies drawing on evolutionary thinking characterised by diversity selection innovation path dependence and bounded rationality an alternative partly complementary theory of environmental policy is suggested specific attention is given to the role of strategies that are aimed at increasing diversity and adaptive flexibility and at reducing risk

optimal dynamic advertising policy for new products advertising is one of the key marketing tools managers have at their disposal to influence their customers into purchasing a new product the overall objective of new product advertising is to inform and persuade customers drawing up an advertising plan for a new product that is under the influence of diffusion phenomenon is not an easy task hence research in this area is very limited in our research we use an empirically proven diffusion demand function that explicitly incorporates the advertising component our results suggest that optimal advertising is determined by the advertising effectiveness discount rate and the ratio of advertisement to profits depending upon the interplay among these factors the optimal advertising takes decrease increase increase decrease monotonically increasing or monotonically decreasing shape

dynamic advertising and pricing with constant demand elasticities in this paper we analyze a stochastic dynamic advertising and pricing model with isoelastic demand the state space is discrete time is continuous and the planing horizon is allowed to be finite or infinite a dynamic version of the dorfman steiner identity will be derived explicit expressions of the optimal advertising and pricing policies of the value function and of the optimal advertising expenditures will be given the general results will be used to analyze the case of impatient customers furthermore particular time inhomogeneous models and homogeneous ones with and without discounting will be examined we will study the social efficiency of a monopolist s optimal policies and the consequences of specific subsidies from a buyer s perspective our analysis reveals that waiting when looking at immediate expected prices is never profitable should two or more units be available but we will also prove that the sequence of average sales prices is monotone decreasing moreover the techniques applied to solve the discrete stochastic advertising and pricing problem will be used to solve a related deterministic control problem with continuous state space

optimal trade credit and lot size policies in economic production quantity models with learning curve production costs abstract in reality a seller e g a supplier or a manufacturer frequently offers his her buyers trade credit e g permissible delay in payment trade credit reduces the buyer s holding cost of inventory and hence attracts new buyers who consider it to be a type of price reduction on the other hand granting trade credit also increases the seller s opportunity cost i e the loss of capital opportunity during the credit period and default risk i e the event in which the buyer will be unable to make the required payments on his her debt obligation in addition it is a well known fact of learning by doing that production cost of a new product declines by a factor of from 10 to 50 percent each time the accumulated production volume doubles therefore we propose an economic production quantity model from the seller s prospective to determine his her optimal trade credit period and production lot size simultaneously in which i trade credit increases not only sales but also opportunity cost and default risk and ii production cost declines and obeys a learning curve phenomenon then the necessary and sufficient conditions to obtain the seller s optimal trade credit and order quantity are derived finally we use some numerical examples to illustrate the theoretical results and to provide some managerial insights

an oligopoly model of dynamic advertising competition abstract an oligopoly model is presented that allows the determination of feedback nash equilibrium advertising strategies for an oligopoly analyses of symmetric and asymmetric oligopolies with the model show that unit contribution and advertising effectiveness have positive effects on a competitor s own advertising and steady state sales while discount rate and decay rate have negative effects an asymmetric analysis further shows that unit contribution and advertising effectiveness affect positively and discount rate and decay rate negatively a competitor s rivals advertising but have effects in opposite directions regarding rivals steady state sales the symmetric and asymmetric analyses also show that steady state sales per competitor decline with the number of competitors in the oligopoly while total oligopoly steady state sales increase the model is applied empirically to the triopolistic competition involving anheuser busch sabmiller and molson coors in the beer industry

modeling the impact of product quality on dynamic pricing and advertising policies abstract the marketing mix of price quality and advertising quality relationship is well studied less understood is the price advertising quality relationship this article fills the gap investigating the interplay between price advertising and quality in an optimal control model our results generalize the condition of dorfman steiner in a dynamic context also they point to the impact of greater product quality on the dynamic policies of pricing and advertising furthermore a phase diagram analysis shows that quality develops monotonically in time and converges to a unique steady state we also show that quality investment could either decrease or increase over time but this depends on its effectiveness our results spot the profitable opportunities of a firm managing a more complex marketing mix

a differential game model of the marketing operations interface in the development of their dynamic strategies the marketing and operations functions within a firm have differing objectives and conflict between the two functions is common the strategic interdependence involving marketing and operations decisions is modeled as a noncooperative differential game demand is assumed to be a function of price and advertising goodwill and marketing controls price and advertising to maximize its discounted stream of revenue net of advertising costs backlogging is allowed and operations controls production to minimize its discounted stream of production and backlog costs a feedback nash equilibrium is derived for the game which allows a solution of the system of differential equations for goodwill and backlog and is analyzed to study the nature of the dynamic strategies for price advertising and production

competitive dynamic advertising a modification of the case game abstract in this paper we consider a modified version of the advertising differential game of case 1979 we derive non cooperative nash equilibria for open loop controls as well as for feedback strategies we consider finite and infinite planning horizons the feedback equilibrium is shown to be robust against stochastic disturbances of the state equation

myopic solutions to affine dynamic models new sufficient conditions are presented for a dynamic process to have a myopic optimum and for a sequential game to possess a myopic equilibrium point an optimum or an equilibrium point is said to be myopic if it can be specified by solving a static optimization problem or a static nash game the results are applied to an aquaculture harvesting model and a dynamic oligopoly model with advertising decisions

optimal joint dynamic pricing advertising and inventory control model for perishable items with psychic stock effect abstract in this study a joint pricing advertising and inventory control problem will be investigated for a firm selling perishable products with psychic stock effect the proposed problem is analyzed in the deterministic multi period setting in which demand at each period depends on not only the amount of inventory displayed and advertising goodwill affected by the firm s current and past advertising efforts but also selling price and freshness index the objective is to determine the optimal pricing advertising and psychic stock strategies maximizing the discount total profit over the infinite planning horizon our theoretical results prove that the firm would adopt a static pricing strategy and then demonstrate that the optimal paths of the advertising goodwill and psychic stock can be determined uniquely we also show that the convergence of the advertising goodwill towards its equilibrium is from above or below depending on the relative location of the initial stock of advertising goodwill with respect to the unique equilibrium stock of advertising goodwill moreover a set of structural properties is developed to explore the relationships among the optimal decisions finally the concluding remarks and suggestions will be provided for future studies

optimal pricing and advertising policies for new product oligopoly models in this paper our previous work on monopoly and oligopoly new product models is extended by the addition of pricing as well as advertising control variables these models contain bass s demand growth model and the vidale wolfe and ozga advertising models as well as the production learning curve model and an exponential demand function the problem of characterizing an optimal pricing and advertising policy over time is an important question in the field of marketing as well as in the areas of business policy and competitive economics these questions are particularly important during the introductory period of a new product when the effects of the learning curve phenomenon and market saturation are most pronounced we consider first the monopoly case with linear advertising cost exponential demand and three different pricing rules the optimal variable pricing the instantaneous marginal pricing and the optimal constant pricing rules several theoretical results are established for these rules including the facts that the instantaneous marginal pricing rule is a myopic version of the optimal pricing rule and the optimal constant pricing rule is a weighted average over time of the instantaneous marginal pricing rule another surprising result is that after the market is at least half saturated a pulse of advertising must be preceded by a significant drop in price numerical solutions of a number of examples are discussed oligopolistic models are analyzed as nonzero sum differential games in the rest of the paper the state and adjoint equations are easy to write down but impossible to solve in closed form hence we describe how to reformulate these models as discrete differential games and give a numerical algorithm for finding open loop nash solutions the latter was used to solve three triopoly models in each case it was found that optimal prices and advertising rates start high and steadily decline

dynamic advertising strategies of competing durable good producers this work develops a diffusion model which incorporates word of mouth and advertising effects for two firms introducing competing brands of a new durable product the competition between the two firms is formulated as a two player nonzero sum markovian game the firms are assumed to behave noncooperatively in choosing their advertising strategies and the solution concept is a nash noncooperative equilibrium optimal advertising policies for this stochastic closed loop control problem are obtained via dynamic programming our results indicate that both firms will start with high advertising outlays which will get reduced as the number of adopters increases this is similar to the result obtained previously for a monopolist further we find that there is a significant value in being the first brand to the market and the greater the intensity of word of mouth effects the greater the value in being first the first entrant advantage is due to the goodwill generated by its stock of previous adopters this first entrant advantage can only be overcome if the second entrant enters with a superior brand which is more enthusiastically endorsed by its adopters

a simulation analysis of alternative pricing strategies for dynamic environments the implicit assumption of the classical economic model of price determination is that the firm maximizes short run profits however one of the key implications of strategy research of the past decade is that short run profit maximization is not an appropriate criterion for many market situations instead market share has been proposed as the key to long term profitability see e g buzzell gale and sultan 1974 abell and hammond 1979 this proposition has had a strong impact on both marketing practice and research hopkins 1981 reports that 88 of industrial firms surveyed spell out market share goals in detail the emphasis on market share in practice has been reflected in the theoretical side also where numerous market share forecasting and maximizing models have been published long term profitability has also become a research interest in its own right more than a dozen papers have appeared in major journals since 1975 the impetus to this activity has been the recognition of the existence of intertemporal effects in the environment for example on the demand side a consumer s purchasing in a given time period may preclude purchasing in the future because of the durability of the good or personal inventory loading on the supply side added current production early in new product introduction may reduce the cost of future proresearchers of the strategic implications of the well known demand e g adoption and diffusion and supply e g experience effects dynamics have typically sought analytical solutions their success in this has been achieved partly by limiting the richness of the dynamics considered this paper describes a simulation modeling capability simstrat which trades off analytical solutions for richer more realistic representations of supply and demand we present the model and then the results of our initial investigations using simstrat when joined with new computer graphics capabilities the model is successful in identifying conditions conducive to skimand penetration pricing strategies

market share pioneering advantage a theoretical approach in this paper we present an industry in which a pioneer has entered accumulated capital in the form of goodwill and in his monopoly period has also reduced his cost of production as a result of some form of learning by doing at some later date a newcomer enters his production cost is higher than that of the monopolist at that date however due to diffusion of information the costs of the two firms equate at some future date once the new firm enters the market a duopolistic game begins in which the firms choose prices and investment rates analyzing this game we discover the conditions under which the final market shares no longer depend on the order of entry the initial cost advantage the length of the monopoly period or the length of time it took the newcomer to overcome the pioneer s cost advantage we analyze the speed and pattern of convergence to the final market shares and the capital path of the pioneer in his monopoly period depending on his beliefs concerning the possibility of entry

recent developments in dynamic advertising research a variety of continuous time differential functions have been developed to investigate dynamic advertising problems in business and economics fields since major dynamic models appearing before 1995 have been reviewed by a few survey papers we provide a comprehensive review of the dynamic advertising models published after 1995 which are classified into six categories i nerlove arrow model and its extensions ii vidale wolfe model and its extensions iii lanchester model and its extensions iv the diffusion models v dynamic advertising competition models with other attributes and vi empirical studies for dynamic advertising problems for each category we first briefly summarize major relevant before 1995 models and then discuss major after 1995 models in details we find that the dynamic models reviewed in this paper have been extensively used to analyze various advertising problems in the monopoly duopoly oligopoly and supply chain systems our review reveals that the diffusion models have not been used to analyze advertising problems in supply chain operations which may be a research direction in the future moreover we learn from our review that very few publications regarding dynamic advertising problems have considered the supply chain competition we also find that very few researchers have used the diffusion model to investigate the dynamic advertising problems with product quality as a decision variable and the pricing decision has not been incorporated into any extant lanchester model the paper ends with a summary of our review and suggestions on possible research directions in the future

competition strategy and price dynamics a theoretical and empirical investigation the authors explore how competition affects dynamic pricing of new products dynamics of diffusion saturation and cost reduction due to experience are all considered with emphasis on the last t

marketing and investment policies of duopolists in a growing industry abstract this article deals with the analysis of the investment price and advertising policies of two firms competing over time the problem is stated as a differential game where each firm tries to maximize its net present value the open loop equilibrium of the game defines the policies to be implemented by the competitors over the horizon the results show how the combination of competition and growth has a relevant influence on the policies of the firms

the determinants of smes market share in 1991 taiwan manufacturers small and medium sized enterprises smes have become increasingly popular in recent decades having caused concern among scholars of various areas our line of research focuses on the determinants of smes market share this study explores the topic base on taiwan s manufacturers data collected in 1991 our empirical results indicate that taiwan has witnessed smes becoming prosperous in manufacturing industries with higher relative labor productivity low entry barriers prosperous subcontracting activities and young ages our results indicate that in the transitory process of industrial development taiwan s smes no longer can afford high wage payments when at the same time the quality of labor does not increase accordingly as taiwan approaches the status of a developed economy the beneficiaries of export activities have changed unlike 1986 in 1991 there was a smaller share of smes in taiwan s export oriented industries furthermore smes benefited from their efforts to increase their automation status the emphasis on issues concerning environmental protection proved to be another source of entry barrier that kept smes from prospering certain similarities arise when comparing our conclusions with those of the u s canada germany and japan all of whom represent industrialized countries we can conclude that as taiwan matures in her industrial development process smes also struggle to a certain maturity in theirs

investment and harvest strategies of the finnish forest sector under different forest tax policies a differential game approach with computer based decision aid abstract this study deals with the simultaneous solution of the investment harvest and taxation problems of the finnish forest sector these strategic questions involve competitive and contradictory interests among forestry the forest industry and society we build a computer based decision aid to support a decision maker who wants to analyze the consequences of different forest tax policies it is essential to this computational approach that only minor mathematical manipulations are needed to produce equilibrium open loop nash harvest and investment strategies moreover as a differential game approach it allows us to study the tax incidence we solve our model under three alternative tax policies lump sum unit and yield taxes

monopolist pricing with dynamic demand and production cost this paper deals with pricing of a new product over time by a monopolist who maximizes the discounted profit stream the interdependency of cost and demand on cumulative production makes the problem inherently dynamic cost is assumed to be declining with cumulative production learning curve effect while demand is a function of price and cumulative sales representing word of mouth and saturation effects the paper addresses this problem in a general framework that includes several previous results as special cases and provides new insights in other situations while the learning curve and word of mouth effect cause prices to be lower than the price that maximizes immediate revenues the saturation factor has the opposite effect the price path over time is affected by these factors and the interest rate we characterize the price path under several different situations and interpret the results for policy guidelines