Dynamic Optimal Pricing and (Possibly) Advertising in the Face of Various Kinds of Potential Entrants

Several nonlinear stochastic models are developed for a dynamic profit-maximizing firm with respect to its price and (possibly) advertising decisions under threat of entry. The optimal price advertising policies for these models are characterized by the use of the Maximum Principle. While the optimal policy will depend on the assumed functional forms, it is shown that, under certain plausible assumptions, the optimal policy is to increase profit by charging a higher price and decrease the resulting threat of entry by a higher level of advertising

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Year of publication:	2020
Authors:	Bourguignon, Francoise
Other Persons:	Sethi, Suresh P. (contributor)
Publisher:	[2020]: [S.l.] : SSRN
Subject:	Werbung \| Advertising \| Theorie \| Theory \| Preismanagement \| Pricing strategy \| Markteintritt \| Market entry
Description of contents:	Abstract [papers.ssrn.com]