Pricing game of online display advertisement publishers

Md. Tanveer Ahmed and Changhyun Kwon

European Journal of Operational Research, 2012, vol. 219, issue 2, 477-487

Abstract: We consider online display advertisement publishers who maximize the revenue by optimal pricing in an oligopoly setting. Each publisher interacts with others through setting cost-per-impression (CPM) that affects the demand for everyone. Using the pseudoconcavity of the objective function, we prove that a unique best response Nash equilibrium exists for each publisher. We also consider the sensitivity of the publisher while other publishers changes their CPM. In both cases, the best response of the publisher depends entirely on her current best response CPM. We provide an algorithm for finding the equilibrium and illustrate by numerical examples.

Keywords: Online display advertising; Optimal pricing; Nash equilibrium; Newsvendor problem (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:219:y:2012:i:2:p:477-487

DOI: 10.1016/j.ejor.2012.01.008

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