1,721,044 research outputs found
When does a royalty clause with a guarantee lead to a no-equilibrium situation in a licensing contract?
No full textWe consider a licensing agreement where a brand owner grants to a manufacturer the rights to use his own brand on the goods she produces. The ‘royalty’ clause requires that the licensee pays a monetary compensation for having such property and it generally consists of a percentage of the licensee's sales. Furthermore, a guaranteed minimum royalty, the so-called guarantee, is also required, and it has to be paid even in the face of total failure of the property.
We take into account such clause by considering a non-differentiable term—the maximum between the guarantee and the percentage of the sales—in the payoffs of the involved parts. A Stackelberg game constituted by two non-differentiable optimal control problems is formulated in order to find the Stackelberg equilibrium open-loop advertising strategies for the licensor and the licensee. We discuss the existence conditions for such an equilibrium with respect to feasible guarantee levels, and we highlight that particular guarantee values lead to a no-equilibrium situations
Linear State Optimal Control Problem with a Stochastic Switching Time
Full text linkIn this paper, we analyse an optimal control problem over a finite horizon with a stochastic switching time, assuming that the two optimal control problems present in its two stages have a particularly simple form called linear state. It is well known that linear state optimal control problems can be solved easily using the HJB equation approach and assuming that the value function is linear in the state. Unfortunately, this simplicity of solution does not extend to the problem with stochastic switching time. We prove that a necessary and sufficient condition for the problem to maintain a linear state structure is to assume that the hazard rate of the switching time depends only on the temporal variable. Finally, assuming that the hazard rate is constant, we completely characterise the solution of the obtained linear state optimal control problem
Optimal sustainable use of drinking water sources and interactions between multiple providers
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Brand Extension Using a Licensing Contract with Uncertainty Advertising Effects
No full textA licensing contract is studied as a Stackelberg differential game with the licensor as the leader and the licensee as the follower. We assume that both players can advertise to increase the brand value, but licensee’s advertising introduces an uncertainty effect in the brand evolution.
The objective of the licensee is to maximize her expected profit, while the objective of the licensor is twofold. He wants to maximize his expected profit and at the same time he wants to extend the value of his brand. If the advertising campaign planned at the beginning of the programming
interval is required to be open-loop and deterministic, then
the stochastic differential game becomes deterministic. We take into account brand extension by mean of two approaches. In the first one we require the mean brand value to be greater than a given threshold, in the second one we require that the final constraint is satisfied with a given probability. We characterize the deterministic optimal strategies for both players and analyze the economic meaning of the obtained results
Coordination of Advertising Strategies in a Fashion Licensing Contract
No full textThe aim of this paper is to characterize cooperative and noncooperative advertising strategies of a licensor and licensee involved in a licensing contract in the fashion business. Licensing is the process of leasing a legally protected entity (brand, name, logo, etc.) in conjunction with a product or product line. It is based on a contractual agreement between two business entities: the owner of the property, called licensor; and the renter of the rights, called licensee. Licensing is seen as a win-win strategy, in which the two partners can achieve their objectives (e.g., expanding the brand, its market reach, etc.). We show that, if the licensor, who acts as the leader, uses an incentive strategy that depends on the licensee advertising, then it can reach the jointly optimal solution in a decentralized way
An optimal-control student problem and a marketing counterpart
No full textWe tackle the problem of an economous and ambitious student with variable and bounded final time. We answer the questions of existence and uniqueness of the optimal solution positively and obtain that solution explicitly. Furthermore, we suggest a marketing interpretation of a slightly modified problem: determining an optimal advertising policy for a new product
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