The Leitmann-Schmitendorf advertising game with n players and time discounting

The extension of the Leitmann-Schmitendorf advertising game to n players and positive time discounting is investigated. We show that the strong time consistency of the open-loop Nash equilibrium is preserved. As to optimal controls, while the boundary solution is unaffected by the number of firms as well as discounting, the inner solution depends on industry structure. The fully symmetric version of the game allows us to identify the parameter regions wherein both solutions are sustainable.

• Type: Journal
• Year: 2010
• Where: AMC
• Authors: Davide Dragone, Luca Lambertini, Arsen Palestini
• Keywords: AMC 2010, Leitmann-Schmitendorf Advertising Game, Open-loop Nash Equilibrium, Strong Time Consistency