Optimal Advertising and Pricing in a New-Product Adoption Model


DOI: 10.1007/s10957-008-9472-5

Cite this article as:
Sethi, S.P., Prasad, A. & He, X. J Optim Theory Appl (2008) 139: 351. doi:10.1007/s10957-008-9472-5


A model of new-product adoption is proposed that incorporates price and advertising effects. An optimal control problem that uses the model as its dynamics is solved explicitly to obtain the optimal price and advertising effort over time. The model has a great potential to be used in obtaining solutions and insights in a variety of differential game settings.


Durable goods sales Advertising Pricing Optimal control Dynamic programming 

Copyright information

© Springer Science+Business Media, LLC 2008

Authors and Affiliations

  1. 1.School of ManagementUniversity of Texas at DallasRichardsonUSA
  2. 2.Belk College of BusinessUniversity of North Carolina at CharlotteCharlotteUSA

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