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
Date Written: October 1989
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
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