A three‐stage time‐lagged diffusion model that incorporates consumers' income, advertising and price effects is proposed. The derivation of the model synthesizes and relies upon a number of important arguments made in the diffusion and economic literature. Optimal control theory is used to derive normative advertising and pricing strategic implications for a monopolist introducing a new durable product.
All Science Journal Classification (ASJC) codes
- Control and Systems Engineering
- Control and Optimization
- Applied Mathematics