Rao, Ram C.; Arjunji, Ramesh V.; Murthi, B. P. S.
June 1995
Marketing Science;1995 Part 2 of 2, Vol. 14 Issue 3, pG89
Academic Journal
This paper offers the generalization that competitive promotions are mixed strategies. First an empirical regularity is established that promotions are independent across competitors. This regularity is then elaborated on in the context of a promotion game. The promotion game is linked to observable outcomes, and a classification of possible situations is developed. In particular, the classification includes the prisoners' dilemma, battle of the sexes, and marketing models of promotion competition. The evidence for the generalization comes from a variety of product markets, spanning trade promotions, retail price reductions, and retail promotions such as advertised specials. The product markets include coffee, baby diapers, toilet tissue, saltines, dishwashing fluid, ketchup, and detergents, among others. The data in some cases were from cooperating grocery chains and in others from IRI scanner panels. The evidence from extant research and from new analyses is presented. Each situation is identified as belonging to one or another element of the classification. Based on the entirety of the evidence, there is strong support for the proposition that competitive promotions are mixed strategies. A second generalization, based on more limited data, is that the depth of promotion has a bimodal distribution. Implications of the generalizations both for managerial practice and future research are discussed.


Related Articles

  • Institutions matter! Why the Herder Problem is not a Prisoner’s Dilemma. Cole, Daniel H.; Grossman, Peter Z. // Theory & Decision;Aug2010, Vol. 69 Issue 2, p219 

    In the game theory literature, Garrett Hardin’s famous allegory of the “tragedy of the commons” has been modeled as a variant of the Prisoner’s Dilemma, labeled the Herder Problem (or, sometimes, the Commons Dilemma). This brief paper argues that important differences...

  • Prisoner's Dilemma: an IBICT's Approach. Letouze, Patrick // International Proceedings of Economics Development & Research;2012, Vol. 42, p244 

    The prisoner's dilemma is a classical example in game theory and may be considered a simple illustration of rationality's failure. Despite that, it is actually that seemingly inconsistency that attracts so many studies and applications such as cooperation and reciprocity. This work presents a...

  • Limited Edition Products: When and When Not to Offer Them. Balachander, Subramanian; Stock, Axel // Marketing Science;Mar/Apr2009, Vol. 28 Issue 2, p336 

    Many brands today introduce limited edition (LE) products as part of their product line. However, little is known about the conditions under which a brand should introduce an LE product or the competitive implications of doing so. We investigate this issue using a game theoretic model of a...

  • COMPETITIVE ORGANIZATIONAL STRUCTURES IN COUPLED MARKETS. Shakun, Melvin F. // Management Science;Aug1968, Vol. 14 Issue 12, pB-663 

    The effect of different company organizational structures (as centralized and decentralized) on competition in coupled markets is studied using a game theory approach. By coupling it is meant that management actions taken in the market for one product have an effect on the market for another. A...

  • How strategy sensitive are contributions? Bolton, Gary E.; Brandts, Jordi; Katok, Elena // Economic Theory;2000, Vol. 15 Issue 2, p367 

    We test six hypotheses for contributions in dilemma games, a category that includes the prisoner's dilemma and public goods games. Our experiment focuses specifically on the strategic interdependence of contributing behavior, and manipulates the strategy space of a two-person dilemma game...

  • ADAM SMITH AND THE PRISONERS' DILEMMA. Tullock, Gordon // Quarterly Journal of Economics;1985 Supplement, Vol. 100 Issue 4, p1073 

    This article comments on the insight of Adam Smith regarding a modern game theory called the prisoners' dilemma. The difference between a prisoners' dilemma game and an ordinary competitive market was discussed. According to the author, it will be observed that Smith was right, and there are...

  • BEYOND THE PRISONERS' DILEMMA: COORDINATION, GAME THEORY, AND LAW. MCADAMS, RICHARD H. // Southern California Law Review;Jan2009, Vol. 82 Issue 2, p209 

    The article seeks to take a different, more practical path in criticizing the legal scholars' use of game theory, one that borrows from the field of political science. They asserted the great value of game theory to legal analysis and hope that it would transform legal theory as it has...

  • Prisoner's Dilemma: A Wireless Simulation of the Romanov Court. McKenzie, Walter // National Educational Technology Standards for Students Curriculu;2004, p175 

    The article provides information about prisoner's dilemma, a well-known game theory which explores the certainties and complications of political decision-making during the revolutionary change. Information regarding the mechanics of the game, a short description and its terminologies are also...

  • Spatial Patterns of Prisoner's Dilemma Game in Metapopulations. Hui, C.; McGeoch, M. A. // Bulletin of Mathematical Biology;Feb2007, Vol. 69 Issue 2, p659 

    Because to defect is the evolutionary stable strategy in the prisoner's dilemma game (PDG), understanding the mechanism generating and maintaining cooperation in PDG, i.e. the paradox of cooperation, has intrinsic significance for understanding social altruism behaviors. Spatial structure serves...


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics