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Pure-strategy Nash equilibria in an advertising game with interference

2011; Elsevier BV; Volume: 216; Issue: 3 Linguagem: Inglês

10.1016/j.ejor.2011.08.002

1872-6860

Bruno Viscolani,

Consumer Market Behavior and Pricing

Two manufacturers produce substitutable goods for a homogeneous market. The advertising efforts of the two manufacturers determine the demand for the goods and interfere negatively with each other. The demand of each good is a piecewise linear function of the product goodwill, and the latter is a linear function of advertising efforts. In a game with two competing profit-maximizing manufacturers who have access to a set of several advertising media, the pure-strategy Nash equilibria are characterized and their existence is shown.