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Optimal Advertising and Pricing in a New-Product Adoption Model

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Abstract

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.

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Authors and Affiliations

  1. School of Management, University of Texas at Dallas, Richardson, TX, USA

    S. P. Sethi & A. Prasad

  2. Belk College of Business, University of North Carolina at Charlotte, Charlotte, NC, USA

    X. He

Authors
  1. S. P. Sethi
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  2. A. Prasad
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  3. X. He
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Corresponding author

Correspondence to S. P. Sethi.

Additional information

Communicated by G. Leitmann.

The authors thank Anshuman Chutani for help with the figures.

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Sethi, S.P., Prasad, A. & He, X. Optimal Advertising and Pricing in a New-Product Adoption Model. J Optim Theory Appl 139, 351–360 (2008). https://doi.org/10.1007/s10957-008-9472-5

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  • DOI: https://doi.org/10.1007/s10957-008-9472-5

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