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Optimal advertisement-innovation mix for maximizing the discounted flow of profit

Shrinivas, Prasanna V and Raghavan, Srinivasa NR (2006) Optimal advertisement-innovation mix for maximizing the discounted flow of profit. In: IEEE International Conference on Automation Science and Engineering,, Oct 08-10, 2006, Shanghai, pp. 562-567.

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Due to boom in telecommunications market, there is hectic competition among the cellular handset manufacturers. As cellular manufacturing industry operates in an oligopoly framework, often price-rigidity leads to non-price wars. The handset manufacturing firms indulge in product innovation and also advertise their products in order to achieve their objective of maximizing discounted flow of profit. It is of interest to see what would be the optimal advertisement-innovation mix that would maximize the discounted How of profit for the firms. We used differential game theory to solve this problem. We adopted the open-loop solution methodology. We experimented for various scenarios over a 30 period horizon and derived interesting managerial insights.

Item Type: Conference Paper
Publisher: IEEE
Additional Information: Copyright 2006 IEEE. Personal use of this material is permitted. However, permission to reprint/republish this material for advertising or promotional purposes or for creating new collective works for resale or redistribution to servers or lists, or to reuse any copyrighted component of this work in other works must be obtained from the IEEE.
Department/Centre: Division of Interdisciplinary Sciences > Management Studies
Date Deposited: 02 Sep 2010 05:09
Last Modified: 19 Sep 2010 06:12
URI: http://eprints.iisc.ac.in/id/eprint/30529

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