Game-Theory Models in the Allocation of Advertising Expenditures

The allocation of advertising expenditures by area and by media is a problem faced by most marketing organizations. The problem with certain assumptions can be treated with some of the techniques of game theory. In this paper several mathematical models will be described along with their solutions. The models are theoretical and are based on various assumptions about the effect of advertising on sales. The validity of these assumptions as well as the possible application of these models is discussed.