A SYMMETRIC MODEL OF ADVERTISING-INVENTORY COMPETITION: SOME THEORETICAL AND EMPIRICAL RESULTS

摘要

Following a game theoretic approach that uses a market share attraction model of advertising competition, this article examines analytically the sensitivity of the optimal order quantity and optimal advertising expenditure to changes in the parameters of a competitive inventoryadvertising model in a symmetric setting. In the reported empirical application it is demonstrated that if model parameters change, asymmetric rivals in the studied oligopolistic industry for which every market share is less than 50% should adjust their order quantity and advertising spending in a manner consistent with the symmetric duopoly structure for which all market shares are equal.