BUDGETING IN ADVERTISING, A GAME THEORETIC MODEL

Abstract

Advertising effectiveness has typically been measured by using regression analysis, or by employing various forms of controlled experiments. In this paper we propose a model by using game theory, a two competitors non-zero sum game model to assist a group of cellular companies in their expenses policy to uplift the profits and share in the market. Various limitations and assumptions are involved in the model; it was assumed that each company of the group provides the same facilities. Also assumed is inflexible demand in such a manner that both groups have identical cost and connection price structure. Even so, this model will help as a basic tool for more complicated models.