Sustaining cooperation in a differential game of advertising goodwill accumulation

Steffen Jorgensen, Ekaterina Gromova

Research output

11 Citations (Scopus)

Abstract

© 2016 Elsevier B.V.The paper suggests a differential game of advertising competition among three symmetric firms, played over an infinite horizon. The objective of the research is to see if a cooperative agreement among the firms can be sustained over time. For this purpose the paper determines the characteristic functions (value functions) of individual players and all possible coalitions. We identify an imputation that belongs to the core. Using this imputation guarantees that, in any subgame starting out on the cooperative state trajectory, no coalition has an incentive to deviate from what was prescribed by the solution of the grand coalition's optimization problem.
Original languageEnglish
Pages (from-to)294–303
JournalEuropean Journal of Operational Research
Volume254
Issue number1
DOIs
Publication statusPublished - 2016

Fingerprint

Differential Games
Coalitions
Marketing
Imputation
Trajectories
Infinite Horizon
Incentives
Characteristic Function
Value Function
Trajectory
Optimization Problem
Advertising
Differential games
Goodwill
Business

Cite this

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