Journal of Applied Mathematics

  • J. Appl. Math.
  • Volume 2014, Special Issue (2013), Article ID 216193, 5 pages.

Spatial Advertisement Competition: Based on Game Theory

Zheng-xun Tan

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Since advertisement is an important strategy of firms to improve market share, this paper highlights duopoly advertisement under the Hotelling model. A model of advertisement under spatial duopoly is established, and corresponding effects of brand values and transportation costs are all captured. This study presents the proportion of sales revenue spending on advertisement. The condition for free-rider in advertisement investment is discussed. Under firms with the identical brand values, if firms' advertisement points to corresponding consumers, price and advertisement investment are all reduced. Therefore, advertisement is discussed under spatial competition in this work.

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J. Appl. Math., Volume 2014, Special Issue (2013), Article ID 216193, 5 pages.

First available in Project Euclid: 1 October 2014

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Tan, Zheng-xun. Spatial Advertisement Competition: Based on Game Theory. J. Appl. Math. 2014, Special Issue (2013), Article ID 216193, 5 pages. doi:10.1155/2014/216193.

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