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A Game Theoretic Approach to Advertising Strategy

Zitnik, Mary E.
http://rave.ohiolink.edu/etdc/view?acc_num=akron1290037257

Abstract Details

2010, Master of Science, University of Akron, Applied Mathematics.
Developing an effective advertising strategy is a key component for a firm to be successfully competitive. This paper uses game theory to examine a duopolistic setting in which two firms have the same product. One firm has the higher price and larger market share and both want to compete through advertising. Assuming subgame perfection, we use backward induction to solve the game. We consider how changes in pricing, advertising expenditures and advertising effectiveness affect profit and market shares. We also investigate how changes in the size of the market affect the behavior of all factors. We find that as either firm becomes more effective, the other must respond through pricing and/or advertising. When both firms are highly effective in their advertising, it becomes more beneficial for neither firm to advertise. We also find that while the size of the market will affect the overall advertising expenditures, it will only minimally affect the price per unit and profit per unit to either firm.
Gerald Young, Dr. (Advisor)
Curtis Clemons, Dr. (Advisor)
Timothy Norfolk, Dr. (Advisor)
62 p.
Business Administration; Marketing
Game Theory; Advertising; Advertising Strategy; Marketing

Recommended Citations

Citations

  • Zitnik, M. E. (2010). A Game Theoretic Approach to Advertising Strategy [Master's thesis, University of Akron]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=akron1290037257

    APA Style (7th edition)

  • Zitnik, Mary. A Game Theoretic Approach to Advertising Strategy. 2010. University of Akron, Master's thesis. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=akron1290037257.

    MLA Style (8th edition)

  • Zitnik, Mary. "A Game Theoretic Approach to Advertising Strategy." Master's thesis, University of Akron, 2010. http://rave.ohiolink.edu/etdc/view?acc_num=akron1290037257

    Chicago Manual of Style (17th edition)

akron1290037257
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© 2010, all rights reserved.
This open access ETD is published by University of Akron and OhioLINK.