TY - JOUR

T1 - On pure-strategy nash equilibria in a duopolistic market share model

AU - Binner, J. M.

AU - Ciardiello, F.

AU - Fletcher, L. R.

AU - Kolokoltsov, V. N.

PY - 2019/6/1

Y1 - 2019/6/1

N2 - This paper develops a duopolistic discounted marketing model with linear advertising costs and advertised prices for mature markets still in expansion. Generic and predatory advertising effects are combined together in the model. We characterize a class of advertising models with some lowered production costs. For such a class of models, advertising investments have a no-free-riding strict Nash equilibrium in pure strategies if discount rates are small. We discuss the entity of this efficiency at varying of parameters of our advertising model. We provide a computational framework in which market shares can be computed at equilibrium, too. We analyze market share dynamics for an asymmetrical numerical scenario where one of the two firms is more effective in generic and predatory advertising. Several numerical insights on market share dynamics are obtained. Our computational framework allows for different scenarios in practical applications and it is developed, thanks to Mathematica software.

AB - This paper develops a duopolistic discounted marketing model with linear advertising costs and advertised prices for mature markets still in expansion. Generic and predatory advertising effects are combined together in the model. We characterize a class of advertising models with some lowered production costs. For such a class of models, advertising investments have a no-free-riding strict Nash equilibrium in pure strategies if discount rates are small. We discuss the entity of this efficiency at varying of parameters of our advertising model. We provide a computational framework in which market shares can be computed at equilibrium, too. We analyze market share dynamics for an asymmetrical numerical scenario where one of the two firms is more effective in generic and predatory advertising. Several numerical insights on market share dynamics are obtained. Our computational framework allows for different scenarios in practical applications and it is developed, thanks to Mathematica software.

KW - Advertising models

KW - brand advertising

KW - computational equilibria

KW - generic advertising

KW - market shares

KW - Nash equilibrium

KW - sticky prices

KW - supply chains

UR - http://www.scopus.com/inward/record.url?scp=85065991301&partnerID=8YFLogxK

U2 - 10.1142/S0219198919400073

DO - 10.1142/S0219198919400073

M3 - Article

AN - SCOPUS:85065991301

VL - 21

JO - International Game Theory Review

JF - International Game Theory Review

SN - 0219-1989

IS - 2

M1 - 1940007

ER -