Quality and the diffusion of innovations

Fouad El Ouardighi, Charles S. Tapiero

Research output: Contribution to journalArticle

Abstract

In this paper, we solve the problem of optimal control of products diffusion by quality in a context of monopolistic competition. To do so, we introduce a dynamic demand function leaning on two hypotheses: first, price acts a signal of quality; second, demand is more sensitive to quality than to price. Using the maximum principle of Pontryagin, we then characterize the optimal dynamic trajectory of quality and its qualitative properties.

Original languageEnglish (US)
Pages (from-to)31-38
Number of pages8
JournalEuropean Journal of Operational Research
Volume106
Issue number1
DOIs
StatePublished - Apr 1 1998

Keywords

  • Diffusion
  • Innovation
  • Optimal control
  • Product planning
  • Quality

ASJC Scopus subject areas

  • Computer Science(all)
  • Modeling and Simulation
  • Management Science and Operations Research
  • Information Systems and Management

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