Optimal Contract-Sizing in Online Display Advertising for Publishers with Regret Considerations
newsboy problem, operations management, risk
Digital Object Identifier (DOI)
In this paper, we study optimal contract problems for online display advertisements with pay-per-view pricing scheme. We first provide and analyze a single contract model, which is shown to be equivalent to the newsvendor problem. We then consider a stochastic optimization problem with two different advertisements and show that a contract to display both of them is not optimal. However, we show that a contract to display of both advertisements may be optimal when we consider the publisher's regret. We consider a chance constraint for the publisher's regret and provide numerical experiments that illustrate the change of optimal strategy for different probability levels.
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Citation / Publisher Attribution
Omega, v. 42, issue 1, p. 201-212
Scholar Commons Citation
Ahmed, Md. Tanveer and Kwon, Changhyun, "Optimal Contract-Sizing in Online Display Advertising for Publishers with Regret Considerations" (2014). Industrial and Management Systems Engineering Faculty Publications. 30.