Document Type : Original Article

Authors

1 PhD in Economics, Department of Economics, Faculty of Economics and Management, Urmia University, Urmia, Iran

2 Assistant Professor of Public Administration, Department of Public Administration, Faculty of Management and Social Sciences, North Tehran Branch, Islamic Azad University, Tehran, Iran

Abstract

In this research, by designing a static game with complete information between the firm (through advertising) and customers (through the effect of advertising on their purchase), the equilibrium and optimal strategy of the players were presented. In this game, the firm will have 6 choices and the customers will have 5 choices. The results showed that B_H B strategy (full purchase with high spending and willingness to buy again and recommend it to others) is considered a dominant strategy for customers, while the firm does not have a dominant strategy. The Nash equilibrium of the game (F, B_H B) is where the company tries to introduce a new product with high quality by improving the quality and advertising a lot (very high absorption) and the customer also makes a complete purchase (spending a lot of money) and the desire to buy again and also, offering it to others gets the highest possible utility. According to the obtained results, it is suggested that firm, while improving the quality of its product, introduces its product with a lot of advertisements and as much as it can to attract many customers and also maximize its profit (utility) and increase public welfare.

Keywords

Main Subjects

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