A pricing strategy of e-commerce advertising cooperation in the Stackelberg game model with different market power structure

DOI10.3390/A12010024MaRDI QIDQ2633285zbMATH OpenOpenAlexWikidataFDO

Authors Ling Zhu, Jie Lin

Publication date 8 May 2019

Published in Algorithms (Search for Journal in Brave)

Copyright license Creative Commons Attribution 4.0 International

Full work available at URL https://doi.org/10.3390/a12010024

zbMATH Keywords

e-commerce advertising cooperationpricing strategyStackelberg game model

Mathematics Subject Classification ID

Marketing, advertising (90B60) Hierarchical games (including Stackelberg games) (91A65) Microeconomic theory (price theory and economic markets) (91B24)

Review text

Summary: A lot of research work has studied the auction mechanism of uncertain advertising cooperation between the e-commerce platform and advertisers, but little has focused on pricing strategy in stable advertising cooperation under a certain market power structure. To fill this gap, this paper makes a study of the deep interest distribution of two parties in such cooperation. We propose a pricing strategy by building two stackelberg master-slave models when the e-commerce platform and the advertiser are respectively the leader in the cooperation. It is analyzed that the optimization solution of the profits of both parties and the total system are affected by some main decision factors including the income commission proportion, the advertising product price and the cost of advertising effort of both parties' brand in different dominant models. Then, some numerical studies are used to verify the effectiveness of the models. Finally, we draw a conclusion and make some suggestions to the platforms and the advertisers in the e-commerce advertising cooperation.

Recommendations

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Cites work

• A game theoretic approach to coordinate pricing and vertical co-op advertising in manufacturer-retailer supply chains
• A survey of game-theoretic models of cooperative advertising
• A two-period game of a closed-loop supply chain
• Cooperative advertising models in supply chain management: a review
• Coordination of cooperative advertising in a two-level supply chain when manufacturer offers discount
• scientific article; zbMATH DE number 2218947 (Why is no real title available?)
• Retail promotions with negative brand image effects: Is cooperation possible?

Cited in

(6)

• Cooperation and decision making in a two-sided market motivated by the externality of a third-party social media platform
• Strategy analysis for a digital content platform considering perishability
• Optimal add-on items recommendation service strength strategy for e-commerce platform with full-reduction-promotion
• A two-stage revenue pricing model for internet advertising with the risk-aversion
• The impact of platform fee scheme on manufacturer-E-tailer co-operative advertising: A game-theoretic analytical study
• Pricing strategy and its impact on the effort of community leader and platform: uniform or differentiated pricing?

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