In:
Management Science, Institute for Operations Research and the Management Sciences (INFORMS), Vol. 25, No. 5 ( 1979-05), p. 454-465
Abstract:
In this article, we examine whether a better econometric specification of the sales-advertising relationship leads to significantly improved decisions. Extending the pioneering work of Nerlove and Arrow, we analyze the sensitivity of the discounted profit flow to the dynamics of advertising. On the basis of a generalized variant of their constant-elasticity model, we compare various lag structures, and derive the corresponding decision rules to determine the optimal advertising budget. Financial consequences of misspecifications of the distributed-lag function are then evaluated. Our investigation is empirically illustrated on the basis of the data which served Palda for his demonstration of advertising cumulative effects.
Type of Medium:
Online Resource
ISSN:
0025-1909
,
1526-5501
DOI:
10.1287/mnsc.25.5.454
Language:
English
Publisher:
Institute for Operations Research and the Management Sciences (INFORMS)
Publication Date:
1979
detail.hit.zdb_id:
206345-1
detail.hit.zdb_id:
2023019-9
SSG:
3,2
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