Looking Forward Approach for dynamic cooperative advertising game model

Abstract

In this paper, we examine a dynamic cooperative advertising game model, where each firm market share depends on its own and its competitors’ advertising decisions. More and more companies are willing to cooperate on the market in order to increase their market share and their joint profit as a result. They cooperate on advertising acting as one company and according to a characteristic function introduced in this work, their joint profit can be reallocated according to some cooperative solution. Looking Forward Approach is applied to the initial game in order to construct a model, where information about the process updates dynamically. Comparison between the solution of initial game model and game model with dynamic updating is illustrated using the numerical simulation.