Abstract
Using a modified Lanchester model, this article demonstrates that the policy of constant advertising spending is superior to a cyclic counterpart, provided that the advertising response functions of competing firms are concave. The competitive model is estimated using filter and non-filter cigarette data. The empirical results suggest the presence of over-advertising and that the relative effectiveness and elasticity of filter cigarette advertising are both higher than those of non-filter cigarette advertising.
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Mesak, H., Darrat, A. A Competitive Advertising Model: Some Theoretical and Empirical Results. J Oper Res Soc 44, 491–502 (1993). https://doi.org/10.1057/jors.1993.85
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DOI: https://doi.org/10.1057/jors.1993.85