Operations of Online Advertising Services and Publisher's Option

Document Type

Article

Publication Date

5-2012

Keywords

online advertising, Nash bargaining game, option contract

Digital Object Identifier (DOI)

https://doi.org/10.1057%2Fjors.2011.84

Abstract

We analyse the use of options for online advertisement publishers. By providing a discount or rewards to advertisers, publishers can utilise their uncertain service capacity, page-views, more efficiently. We use Generalised Nash Bargaining to study the feasibility of the option contract and solve for an optimal value for the option price. We compare the revenues and benefits from advertisements under the option contract, with those without the options using numerical studies. We also study the impact of pricing and other components in the game on the optimal option price, the publisher's revenues, and the advertiser's benefits from the advertisements.

Was this content written or created while at USF?

No

Citation / Publisher Attribution

Journal of the Operational Research Society, v. 63, issue 5, p. 674-682

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