Article Contents
Article Contents

# Analysis on the in-app advertising contract of a mobile platform and two competitive app developers

• *Corresponding author: Xiao-chen Sun

The second author is supported by NSFC grant 72132007

Mathematics Subject Classification: Primary: 91B41, 91B06; Secondary: 91A06.

 Citation:

• Figure 1.  Market Structure

Figure 2.  Seven decision intervals for the platform

Figure 3.  The trend of $r_{AX}$ about $V_A$

Table 1.  Summary of Notation

 Decision variables $r_{AX}$ Platform P's ad revenue-sharing percentage with X $r_{AY}$ Platform P's ad revenue-sharing percentage with Y $P_X$ X's App price $P_Y$ Y's App price Other variables $n_X$ App demand of X (number of participating app X users) $n_Y$ App demand of Y (number of participating app Y users) $n_{AX}$ Ad demand in app X $n_{AY}$ Ad demand in app Y $\pi_P$ Platform owner's profit $\pi_X$ App X developer's profit $\pi_Y$ App Y developer's profit $\pi_{AX}$ Advertiser's profit by placing advertisements in app X $\pi_{AY}$ Advertiser's profit by placing advertisements in app Y Parameters $P_{AX}$ X's ad price $P_{AY}$ Y's ad price $r_{SX}$ Platform P's app sales revenue-sharing percentage with X $r_{SY}$ Platform P's app sales revenue-sharing percentage with Y $v_X$ App user's valuation for the app of X $v_Y$ App user's valuation for the app of Y $m$ Total number of potential advertisers $\beta$ Probability of each ad in the app appearing in the ad slot $\gamma$ Nuisance cost when the ad space in the app is filled with an ad $v_A$ An advertiser's valuation for advertising $V_A$ Maximum advertiser's valuation for advertising

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