Note--Optimal Recruitment Advertising

The optimal rules for the allocation of advertising expenditure when that expenditure affects the demand function facing the firm have been derived for a variety of processes and are relatively well known. The purpose of this paper is to extend the analysis of advertising to include recruitment advertising. We study the optimal rules for the cases where recruitment advertising acts as a current or capital input and finally in a diffusion model where advertising influences the rate at which potential recruits become aware of the firm.