Infinite-horizon optimal advertising in a market for durable goods

In this paper we analyse the optimal infinite-horizon advertising policy of a monopolist firm in a market for durable goods, based on classic models by Vidale–Wolfe and Nerlove–Arrow. A set of necessary conditions for optimality generalizing previous results is provided for the resulting non-convex system. In addition, we establish local (and in some cases global) asymptotic convergence of an optimal trajectory towards the unique optimal steady state.