A competitive advertising model: Some theoretical and empirical results

A competitive advertising model: Some theoretical and empirical results

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Article ID: iaor1994133
Country: United Kingdom
Volume: 44
Issue: 5
Start Page Number: 491
End Page Number: 502
Publication Date: May 1993
Journal: Journal of the Operational Research Society
Authors: ,
Keywords: Lanchester theory and models
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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