IDEAS home Printed from https://ideas.repec.org/a/eee/ejores/v219y2012i2p477-487.html
   My bibliography  Save this article

Pricing game of online display advertisement publishers

Author

Listed:
  • Ahmed, Md. Tanveer
  • Kwon, Changhyun

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.

Suggested Citation

  • Ahmed, Md. Tanveer & Kwon, Changhyun, 2012. "Pricing game of online display advertisement publishers," European Journal of Operational Research, Elsevier, vol. 219(2), pages 477-487.
    • Handle: RePEc:eee:ejores:v:219:y:2012:i:2:p:477-487
    DOI: 10.1016/j.ejor.2012.01.008
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0377221712000252
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ejor.2012.01.008?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jong-Shi Pang & Masao Fukushima, 2005. "Quasi-variational inequalities, generalized Nash equilibria, and multi-leader-follower games," Computational Management Science, Springer, vol. 2(1), pages 21-56, January.
    2. Jen-Chih Yao, 1994. "Variational Inequalities with Generalized Monotone Operators," Mathematics of Operations Research, INFORMS, vol. 19(3), pages 691-705, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Heidrun Hoppe-Wewetzer & Christian Siemering, 2022. "Advertisement-financed credit ratings," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 46(1), pages 188-206, January.
    2. Zoltán SOMOSI, 2022. "The Role Of Artificial Intelligence In Content Creation And Checking Its Effectiveness In The Google Ads Advertising System," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 2(2), pages 259-270, December.
    3. Jiang, Guoyin & Tadikamalla, Pandu R. & Shang, Jennifer & Zhao, Ling, 2016. "Impacts of knowledge on online brand success: an agent-based model for online market share enhancement," European Journal of Operational Research, Elsevier, vol. 248(3), pages 1093-1103.
    4. Hoppe-Wewetzer, Heidrun C. & Siemering, Christian, 2020. "Advertisement-Financed Credit Ratings," CEPR Discussion Papers 14735, C.E.P.R. Discussion Papers.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Giorgia Oggioni & Yves Smeers & Elisabetta Allevi & Siegfried Schaible, 2012. "A Generalized Nash Equilibrium Model of Market Coupling in the European Power System," Networks and Spatial Economics, Springer, vol. 12(4), pages 503-560, December.
    2. Ciarcià, Carla & Daniele, Patrizia, 2016. "New existence theorems for quasi-variational inequalities and applications to financial models," European Journal of Operational Research, Elsevier, vol. 251(1), pages 288-299.
    3. Contreras, Javier & Krawczyk, Jacek & Zuccollo, James, 2008. "The invisible polluter: Can regulators save consumer surplus?," MPRA Paper 9890, University Library of Munich, Germany.
    4. Jiang, Zhoutong & Lei, Chao & Ouyang, Yanfeng, 2020. "Optimal investment and management of shared bikes in a competitive market," Transportation Research Part B: Methodological, Elsevier, vol. 135(C), pages 143-155.
    5. Alexey Izmailov & Mikhail Solodov, 2014. "On error bounds and Newton-type methods for generalized Nash equilibrium problems," Computational Optimization and Applications, Springer, vol. 59(1), pages 201-218, October.
    6. J. Contreras & J. B. Krawczyk & J. Zuccollo, 2016. "Economics of collective monitoring: a study of environmentally constrained electricity generators," Computational Management Science, Springer, vol. 13(3), pages 349-369, July.
    7. Julien, Ludovic A., 2017. "On noncooperative oligopoly equilibrium in the multiple leader–follower game," European Journal of Operational Research, Elsevier, vol. 256(2), pages 650-662.
    8. Contreras, Javier & Krawczyk, Jacek & Zuccollo, James, 2008. "Can planners control competitive generators?," MPRA Paper 10395, University Library of Munich, Germany.
    9. Migot, Tangi & Cojocaru, Monica-G., 2020. "A parametrized variational inequality approach to track the solution set of a generalized nash equilibrium problem," European Journal of Operational Research, Elsevier, vol. 283(3), pages 1136-1147.
    10. Victor DeMiguel & Huifu Xu, 2009. "A Stochastic Multiple-Leader Stackelberg Model: Analysis, Computation, and Application," Operations Research, INFORMS, vol. 57(5), pages 1220-1235, October.
    11. Axel Dreves & Christian Kanzow & Oliver Stein, 2012. "Nonsmooth optimization reformulations of player convex generalized Nash equilibrium problems," Journal of Global Optimization, Springer, vol. 53(4), pages 587-614, August.
    12. Anna Schwele & Christos Ordoudis & Pierre Pinson & Jalal Kazempour, 2021. "Coordination of power and natural gas markets via financial instruments," Computational Management Science, Springer, vol. 18(4), pages 505-538, October.
    13. Ming Hu & Masao Fukushima, 2011. "Variational Inequality Formulation of a Class of Multi-Leader-Follower Games," Journal of Optimization Theory and Applications, Springer, vol. 151(3), pages 455-473, December.
    14. James Ang & Masao Fukushima & Fanwen Meng & Takahiro Noda & Jie Sun, 2013. "Establishing Nash equilibrium of the manufacturer–supplier game in supply chain management," Journal of Global Optimization, Springer, vol. 56(4), pages 1297-1312, August.
    15. Vu Thi Huong & Jen-Chih Yao & Nguyen Dong Yen, 2017. "On the Stability and Solution Sensitivity of a Consumer Problem," Journal of Optimization Theory and Applications, Springer, vol. 175(2), pages 567-589, November.
    16. Riccardi, R. & Bonenti, F. & Allevi, E. & Avanzi, C. & Gnudi, A., 2015. "The steel industry: A mathematical model under environmental regulations," European Journal of Operational Research, Elsevier, vol. 242(3), pages 1017-1027.
    17. ABADA, Ibrahim & EHRENMANN, Andreas & SMEERS, Yves, 2014. "Endogenizing long-term contracts in gas market models," LIDAM Discussion Papers CORE 2014036, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    18. Han, Deren & Zhang, Hongchao & Qian, Gang & Xu, Lingling, 2012. "An improved two-step method for solving generalized Nash equilibrium problems," European Journal of Operational Research, Elsevier, vol. 216(3), pages 613-623.
    19. Xia Yang & Xuegang Jeff Ban & Rui Ma, 2017. "Mixed Equilibria with Common Constraints on Transportation Networks," Networks and Spatial Economics, Springer, vol. 17(2), pages 547-579, June.
    20. Shipra Singh & Aviv Gibali & Simeon Reich, 2021. "Multi-Time Generalized Nash Equilibria with Dynamic Flow Applications," Mathematics, MDPI, vol. 9(14), pages 1-23, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ejores:v:219:y:2012:i:2:p:477-487. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eor .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.