A pulsing model of advertising competition: A game theoretic approach, part A — Theoretical foundation

Mesak, Hani I.; Calloway, James A.

doi:10.1016/0377-2217(94)00112-p

Cited by 16 publications

(3 citation statements)

References 30 publications

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“…Most of these papers (e.g., Bass et al. 2005, Deal 1979, Erickson 1985, 1995, 2009, Fruchter 1999, Fruchter and Kalish 1997, Mesak and Calloway 1995, Naik et al. 2008, Prasad and Sethi 2004, Sorger 1989, Wang and Wu 2001) investigate the advertising decisions of duopolistic firms without taking into consideration other marketing‐mix variables.…”

Section: Literature Reviewmentioning

confidence: 99%

“…There is a large body of literature studying duopolistic advertising competition. Most of these papers (e.g., Bass et al 2005, Deal 1979, Erickson 1985, 1995, 2009, Fruchter 1999, Fruchter and Kalish 1997, Mesak and Calloway 1995, Naik et al 2008, Prasad and Sethi 2004, Sorger 1989, Wang and Wu 2001 investigate the advertising decisions of duopolistic firms without taking into consideration other marketing-mix variables. But there are certainly some exceptions, especially in the context of sponsored search advertising, where price competition has been considered together with advertising competition.…”

Section: Advertising Competitionmentioning

confidence: 99%

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Advertising Competition on the Internet: Operational and Strategic Considerations

Liu

Mookerjee

2018

Production and Operations Management

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The emerging click‐based pricing models for Internet advertising provide the firm with two possible decision processes to manage an advertising campaign, namely, spending‐based and traffic‐based. The spending‐based process starts with the spending budget and determines the traffic accordingly, whereas the traffic‐based process starts with a target level of traffic and determines the spending budget accordingly. We consider a duopoly where two electronic retailing firms—that compete for customer traffic—make demand generation (advertising) and demand fulfillment (IT capacity) decisions in equilibrium. Our analysis shows that the inclusion of operational considerations softens the level of competition between the firms and is better for both firms. Concerning the decision process, we find that traffic‐based competition generates higher profits for both firms than those generated in spending‐based competition. However, when the decision process is itself a choice, a spending‐based advertising is chosen by both firms in equilibrium. We discuss how managers can be strategic about the choice of the decision process when competing for customer traffic.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Advertising Competitionmentioning

confidence: 99%

Advertising Competition on the Internet: Operational and Strategic Considerations

Liu

Mookerjee

2018

Production and Operations Management

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show abstract

“…The price-dependent demand model was followed by another stream of research to integrate the inventory model with advertisingdependent demand ( [16]; [21]; [38]; [40]). While the aforementioned research considered only a single firm, there have been a few studies within a static framework on advertising competition in duopoly / oligopolies ( [17]; [25]; [26]; [31]). The above studies, however, do not consider inventory related costs in the modeling effort.…”

Section: Introductionmentioning

confidence: 99%