A dynamic marketing model with best reply and inertia. (English) Zbl 1354.91097
Summary: In this paper we consider a nonlinear discrete-time dynamic model proposed by P. Farris et al. [“Why is five a crowd in the market share attraction model: the dynamic stability of competition”, J. Res. Manage 1, No. 1, 29–45 (2005; doi:10.2139/ssrn.282535)] as a market share attraction model with two firms that decide marketing efforts over time according to best reply strategies with naïve expectations. The model also considers an adaptive adjustment toward best reply, a form of inertia or anchoring attitude, and we investigate the effects of heterogeneities among firms. A rich scenario of local and global bifurcations is obtained even with just two competing firms, and a comparison is proposed with apparently similar duopoly models based on repeated best reply dynamics with naïve expectations and adaptive adjustment.
MSC:
| 91B55 | Economic dynamics |
| 37N40 | Dynamical systems in optimization and economics |
| 37M05 | Simulation of dynamical systems |
Keywords:
discrete-time dynamic marketing model; nonlinear dynamic marketing model; local bifurcation; global bifurcation; best replyReferences:
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