Optimal Advertising and Pricing for a Three-Stage Time-Lagged Monopolistic Diffusion Model Incorporating Income

Optimal Control Applications and Methods Volume 10, Issue 4, pages 313–331

19 Pages Posted: 30 May 2016

See all articles by Kamel Jedidi

Kamel Jedidi

Columbia Business School - Marketing

J. Eliashberg

University of Pennsylvania - Marketing Department

Wayne S. DeSarbo

Pennsylvania State University

Date Written: October 1989

Abstract

A three-stage time-lagged diffusion model that incorporates consumers' income, advertising and price effects is proposed. The derivation of the model synthesizes and relies upon a number of important arguments made in the diffusion and economic literature. Optimal control theory is used to derive normative advertising and pricing strategic implications for a monopolist introducing a new durable product.

Keywords: Innovations diffusion, Advertising, Pricing, Economic models

Suggested Citation

Jedidi, Kamel and Eliashberg, Jehoshua (Josh) and DeSarbo, Wayne S., Optimal Advertising and Pricing for a Three-Stage Time-Lagged Monopolistic Diffusion Model Incorporating Income (October 1989). Optimal Control Applications and Methods Volume 10, Issue 4, pages 313–331. Available at SSRN: https://ssrn.com/abstract=2785849

Kamel Jedidi

Columbia Business School - Marketing ( email )

New York, NY 10027
United States

Jehoshua (Josh) Eliashberg

University of Pennsylvania - Marketing Department ( email )

700 Jon M. Huntsman Hall
3730 Walnut Street
Philadelphia, PA 19104-6340
United States

Wayne S. DeSarbo (Contact Author)

Pennsylvania State University ( email )

University Park
State College, PA 16802
United States

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