The stochastic goodwill problem

Stochastic control problems related to optimal advertising under uncertainty are considered. In particular, we determine the optimal strategies for the problem of maximizing the utility of goodwill at launch time and minimizing the disutility of a stream of advertising costs that extends until the l...

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Bibliographic Details
Published in:European journal of operational research 2007, Vol.176 (1), p.389-404
Main Author: MARINELLI, Carlo
Format: Article
Language:English
Subjects:
Advertising expenditures
Applied sciences
Exact sciences and technology
Firm modelling
Goodwill
Operational research and scientific management
Operational research. Management science
Optimization
Stochastic models
Studies
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Summary:Stochastic control problems related to optimal advertising under uncertainty are considered. In particular, we determine the optimal strategies for the problem of maximizing the utility of goodwill at launch time and minimizing the disutility of a stream of advertising costs that extends until the launch time for some classes of stochastic perturbations of the classical Nerlove-Arrow dynamics. We also consider some generalizations such as problems with constrained budget and with discretionary launching. [PUBLICATION ABSTRACT]
ISSN:0377-2217
1872-6860
DOI:10.1016/j.ejor.2005.08.021