Publication
In this paper we analyse the optimal infinite-horizon advertising policy of a monopolist firm in a market for durable goods, based on classic models by Vidale–Wolfe (Oper. Res. 1957; 5(3):370–381) and Nerlove–Arrow (Economica 1962; 29 (114):129–142). A set of necessary conditions for optimality generalizing previous results is provided for the resulting non-convex system. In addition, we establish local (and in some cases global) asymptotic convergence of an optimal trajectory towards the unique optimal steady state.
Michel Bierlaire, Virginie Janine Camille Lurkin, Stefano Bortolomiol