Equilibrium Analysis of an Advertising-Inventory-Pricing Competitive Model

摘要

Using a market share attraction structure of advertising competition, this research introduces first, a parsimonious inventory-advertising model for which competition is limited to two symmetric firms and obtains its related comparative statics. Following a supermodular game approach, the derived comparative statics remain robust upon considering non-dominant firms competing in an asymmetric oligopoly of N rivals where each firm controls the inventory / advertising decision variables in addition to controlling price. The generalization appears applicable to both non-dominated oligopolies as well as dominated oligopolies. The study also derives closed form solutions for symmetric equilibrium advertising, price and order quantity together with related comparative statics.