TITLE:
Analyzing Social Media on Advertising Markets: A Game Theory Perspective
AUTHORS:
Yiwei Liu
KEYWORDS:
Game Theory, Nash Equilibrium, Social Media, Advertising
JOURNAL NAME:
American Journal of Industrial and Business Management,
Vol.13 No.8,
August
30,
2023
ABSTRACT: This research explores the application of game
theory in analyzing the intricate relationships among advertisers, social media
platforms, and users in the advertising markets. By examining the strategic
aspects of game theory, the study sheds light on the strategies, equilibria,
and outcomes that shape the landscape of social media advertising. This thesis
investigates how advertisers strategically compete on social media platforms,
considering factors such as targeting, bidding, and adaptation. It also
explores the factors influencing user behavior and advertising policies,
including user preferences, engagement levels, peer recommendations, platform
algorithms, and privacy concerns. Through the analysis of equilibrium outcomes
and market structures, it reveals the oligopoly market structure, targeting and
personalization strategies, and the dynamics of advertisement auctions and
pricing. Last but not least, this thesis provides suggestions for policymakers
to take into consideration so that they can make the most advantageous decision
appropriately.