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Pure-strategy Nash equilibria in an advertising game with interference
Authors:Bruno Viscolani
Institution:Department of Pure and Applied Mathematics, University of Padua, Via Trieste 63, I-35121 Padua, Italy
Abstract:Two manufacturers produce substitutable goods for a homogeneous market. The advertising efforts of the two manufacturers determine the demand for the goods and interfere negatively with each other. The demand of each good is a piecewise linear function of the product goodwill, and the latter is a linear function of advertising efforts. In a game with two competing profit-maximizing manufacturers who have access to a set of several advertising media, the pure-strategy Nash equilibria are characterized and their existence is shown.
Keywords:Game theory  Marketing  Non-cooperative games  Advertising  Nash equilibrium  Nonsmooth optimization
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