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ENDOGENOUS CHOICE ON ADVERTISING PRICING OF MEDIA PLATFORMS: LUMP-SUM FEE VS. PROPORTIONAL FEE

Lijun Pan

Hitotsubashi Journal of Economics2017https://doi.org/10.15057/28616article
ABDC B
Weight
0.34

Abstract

Media platforms face the choice between lump-sum and proportional fees when they charge advertisers. This paper builds a two-stage dynamic game model to solve an endogenous choice problem with regard to the advertising pricing instruments of two media platforms. If either the proportional fee or the lump-sum fee is feasible, the dominant strategy for both platforms is to charge advertisers a proportional fee. This explains why online media platforms prefer to charge advertisers the proportional fee. We also examine the asymmetric pricing between two platforms that adopt different advertising schemes, which sheds light on the competition between online media and traditional media.

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https://doi.org/https://doi.org/10.15057/28616

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@article{lijun2017,
  title        = {{ENDOGENOUS CHOICE ON ADVERTISING PRICING OF MEDIA PLATFORMS: LUMP-SUM FEE VS. PROPORTIONAL FEE}},
  author       = {Lijun Pan},
  journal      = {Hitotsubashi Journal of Economics},
  year         = {2017},
  doi          = {https://doi.org/https://doi.org/10.15057/28616},
}

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ENDOGENOUS CHOICE ON ADVERTISING PRICING OF MEDIA PLATFORMS: LUMP-SUM FEE VS. PROPORTIONAL FEE

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Evidence weight

0.34

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.00 × 0.4 = 0.00
M · momentum0.80 × 0.15 = 0.12
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.