Dynamic advertising with spillovers: Cartel vs competitive fringe |
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| Authors: | Luca Lambertini Arsen Palestini |
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| Affiliation: | 1. Department of Economics, University of Bologna, Strada Maggiore 45, 40125 Bologna, Italy;2. RCEA, Via Patara 3, 47900 Rimini, Italy;3. ENCORE, University of Amsterdam, Roetersstraat 11, WB1018 Amsterdam, The Netherlands |
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| Abstract: | A differential oligopoly game with advertising is investigated, where different dynamics occur between two groups of agents, the former playing a competitive Nash game and the latter cooperating as a cartel. Sufficient conditions for stability and a qualitative analysis of the profit ratio and social welfare at equilibrium are provided. A threshold value for the size of the competitive fringe is pointed out by a suitable numerical simulation. Copyright © 2009 John Wiley & Sons, Ltd. |
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| Keywords: | advertising differential games oligopoly collusion optimal control |
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