Coordination of Pricing and Marketing Decisions of the New Product A Game Theory

Nowadays, the development and production of a new product are one of the most important factors for companies’ growth. As well, the pricing and marketing of a new product along with old products have special issues in determining the amount of demand and the amount of profit. In this research, four approaches have been used to obtain the amount of demand, profit, and price of the old and new products. These approaches include the Nash equilibrium game, the Stackelberg game of the new product (the new product, the leader), the Stackelberg game of the old product (the old product-leader) and the game in cooperative. These approaches have been discussed in two cases which are general and limited. In the limited case, " the " advertising for old products is illegal. The results indicate that the cooperative game has more profit. It should be mentioned that if the players have the same decision-making power, the Nash equilibrium game is suggested. Also, if the players have more power on the market so that they can impose their decisions on the other player the Stackelberg game is proposed.