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A Stackelberg Game Of Innovation Diffusion: Pricing, Advertising And Subsidy Strategies

Author

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  • LUIGI DE CESARE

    (Facoltà di Economia, Università di Lecce, Via per Monteroni - Ecotekne, 73100 Lecce, Italy;
    Istituto per Ricerche di Matematica Applicata, CNR, Bari, Italy)

  • ANDREA DI LIDDO

    (Istituto per Ricerche di Matematica Applicata, CNR, Bari, Italy;
    Facoltà di Economia, Università di Foggia, Via IV Novembre, 71100 Foggia, Italy)

Abstract

We consider a firm that wishes to maximise the profits coming from the sale of a new product or technology by determining an optimal price and advertising strategy. A public authority wishes to accelerate and stimulate the adoption of the new product by using a budget to give price subsidies directly to the consumers. The problem is set up as a Stackelberg differential game.

Suggested Citation

  • Luigi De Cesare & Andrea Di Liddo, 2001. "A Stackelberg Game Of Innovation Diffusion: Pricing, Advertising And Subsidy Strategies," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 3(04), pages 325-339.
    • Handle: RePEc:wsi:igtrxx:v:03:y:2001:i:04:n:s0219198901000476
    DOI: 10.1142/S0219198901000476
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    Cited by:

    1. Agnieszka Wiszniewska-Matyszkiel & Marek Bodnar & Fryderyk Mirota, 2015. "Dynamic Oligopoly with Sticky Prices: Off-Steady-state Analysis," Dynamic Games and Applications, Springer, vol. 5(4), pages 568-598, December.
    2. Luigi De Cesare & Andrea Di Liddo & Stefania Ragni, 2003. "Numerical Solutions to Some Optimal Control Problems Arising from Innovation Diffusion," Computational Economics, Springer;Society for Computational Economics, vol. 22(2), pages 173-186, October.
    3. Luigi De Cesare & Andrea Di Liddo & Stefania Ragni, 2002. "Numerical solution of some optimal control problems arising from innovation diffusion," Computing in Economics and Finance 2002 221, Society for Computational Economics.

    More about this item

    JEL classification:

    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • C0 - Mathematical and Quantitative Methods - - General
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

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