IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v29y1983i12p1436-1443.html
   My bibliography  Save this article

Note---Optimal Long-Run Equilibrium Advertising Level for the Blattberg-Jeuland Model

Author

Listed:
  • Suresh P. Sethi

    (University of Toronto)

Abstract

The purpose of this note is to formulate and solve a dynamic optimization problem based on the Blattberg-Jeuland advertising model. Also examined is the behavior of the optimal long-run equilibrium level of advertising with respect to changes in some important parameters of the problem. In particular, a new interesting result, showing that the equilibrium optimal level of advertising for the B-J model is a nonmonotone function of the rate of decay parameter, is derived. That is, the equilibrium optimal level of advertising is an increasing function of the rate of decay for smaller rates of decay and a decreasing function for larger rates of decay than a critical rate of decay. This phenomenon is analogous to a sink effect and is intuitively appealing. It is also shown that the equilibrium optimal level of advertising is a decreasing function of the insertion cost and discount rate parameters. Finally, the framework presented in this note is also useful in analyzing further extensions of the problem solved here.

Suggested Citation

  • Suresh P. Sethi, 1983. "Note---Optimal Long-Run Equilibrium Advertising Level for the Blattberg-Jeuland Model," Management Science, INFORMS, vol. 29(12), pages 1436-1443, December.
    • Handle: RePEc:inm:ormnsc:v:29:y:1983:i:12:p:1436-1443
    DOI: 10.1287/mnsc.29.12.1436
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.29.12.1436
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.29.12.1436?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. (Sundar) Balakrishnan, P. V. & Hall, Nicholas G., 1995. "A maximin procedure for the optimal insertion timing of ad executions," European Journal of Operational Research, Elsevier, vol. 85(2), pages 368-382, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:29:y:1983:i:12:p:1436-1443. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.