Journal of Optimization Theory and Applications

, Volume 29, Issue 4, pp 615–627

Optimal advertising policy with the contagion model

  • S. P. Sethi
Contributed Papers

Abstract

This paper considers an optimal control problem for the dynamics of a contagion model, the optimal control being the rate of advertising expenditure that maximizes the present value of net profit streams over an infinite horizon. By using a Green's theorem approach, it is shown that there are multiple optimal stationary equilibria and that the optimal path from any given initial condition is a nearest feasible path to one of these equilibria.

Key Words

Optimal control advertising Green's theorem approach nearest feasible path infinite horizon optimal stationary equilibria economic application 

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Copyright information

© Plenum Publishing Corporation 1979

Authors and Affiliations

  • S. P. Sethi
    • 1
  1. 1.Faculty of Management StudiesUniversity of TorontoTorontoCanada

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