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Journal of Applied Mathematics - Volume 2014 2014, Article ID 216193, 5 pages -

Research Article

Department of Finance, Jinan University, Guangzhou 510632, China

Institute of Finance, Jinan University, Guangzhou 510632, China

Received 26 December 2013; Accepted 27 January 2014; Published 6 March 2014

Academic Editor: Pei-ai Zhang

Copyright © 2014 Zheng-xun Tan. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.


Since advertisement is an important strategy of firms to improve market share, this paper highlights duopoly advertisement under the Hotelling model. A model of advertisement under spatial duopoly is established, and corresponding effects of brand values and transportation costs are all captured. This study presents the proportion of sales revenue spending on advertisement. The condition for free-rider in advertisement investment is discussed. Under firms with the identical brand values, if firms- advertisement points to corresponding consumers, price and advertisement investment are all reduced. Therefore, advertisement is discussed under spatial competition in this work.

Autor: Zheng-xun Tan



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