<p>Search advertising refers to the practice where advertisers place their text-based advertisement on the search engine's result page along with the organic search results. With its growing importance, search advertising has seen a recent surge in academic interest. However, the literature has been ignoring some practical yet important problems of advertisers, including the keyword selection problem. In my dissertation, I focus on the keyword selection problem, more specifically, the choice of branded keywords in search advertising.</p> <p>My dissertation begins with an observation on different patterns of branded keyword purchase behavior by the brand owner and its competitor. Under some branded keywords, we observe in the sponsored link, only the brand owner or only the competitor. However, under some other branded keywords, we observe both firms, or neither of them. Upon this phenomenon, I aim to understand what drives this puzzling pattern in a competitive environment. To this purpose, I develop a duopoly model where two firms compete in the product market with both horizontally and vertically differentiated products. Their products are evaluated by consumers whose perception is affected by what they see in search advertising. With this setup, Then I derive a subgame perfect equilibrium of the two stage game.</p> <p>In a pricing equilibrium, I find that any benefit a firm gets from search advertising either due to exposure benefit or due to contrast or assimilation, helps this firm charge higher price while forcing the other firm charge lower price. This result affects the incentive for each firm to buy the branded keyword in the advertising stage. Specifically, firms have an incentive to buy the keyword only when the cost of advertising is justified by the exposure benefit but even in that case, each firm buys only when the detrimental context effect is not present. If the quality difference between the brand owner and the competitor is large and thus there exists a contrast between the two firms, the competitor with low quality product refrains from buying the keyword, because the contrast effect hurts the competitor. On the other hand, if the quality difference is small and thus two brands are assimilated, the brand owner with high quality product refuses to buy the keyword, because it is hurt by the assimilation effect. If the quality difference is in the intermediate range so that neither context effect is harmful to neither firm, both firms buy the keyword at the same time. On probing further the underlying incentives, I find that in some cases, the brand owner may buy its own keyword only to defend itself from the competitor's threat. In contrast, I also identify the case where the brand owner chooses to buy its own keyword and precludes the competitor from buying it. My result also suggests that both firms may be worse off by engaging in advertising, as in the prisoner's dilemma case.</p> <p>On an extension, I provide an analysis on the impact of the insufficient advertising budget. If the budget is limited, both firms may have an incentive to hurt the other firm taking the higher slot, by increasing the bid amount and thus quickly exhausting the competitor's budget. The budget constraint also deprives the advertisers of the incentive to buy the keyword and thus, the budget-constrained advertisers may refuse to match the competitor's purchase of the keyword. Finally, the experimental investigation shows the existence of the exposure effect and the context effects. It also supports the model prediction based on estimated model parameters together with the empirical observation.</p> / Dissertation

Decision-making is something we do every day, and is a broad research area that impacts disciplines spanning from economics to philosophy to psychology. The question of rational behavior has been of particular interest (Colman, 2003). A specific area of decision-making where rationality has been investigated is game theory, which deals with the interactions of two or more opponents in a competitive situation (e.g., von Neumann and Morgenstern, 1944). The dominant theoretical perspective in this area claims individuals try to maximize expected utility when making decisions (e.g., Luce and Raiffa, 1957). An alternative theory has been put forth to better explain experimental deviations from utility theory and rationality. Causal decision theory is based on the assumption that individuals incorporate causal knowledge in decisions, while trying to maximize causal utility (e.g., Sloman, 2005). The present study delineated these theoretical approaches as strategies that can be utilized in game theoretic situations (based on a strategy choice perspective in deductive reasoning developed by Robinson and Hertzog, 2005). The role of causal models, strategy choice, and temporal assumptions were investigated. In both experiments, there was support for causal decision theory and the primary prediction that a direct causal model leads to more cooperation in competitive situations. Conversely, those individuals that were given (or assumed) a common cause model chose to cooperate less. Qualitative coding and strategy self-reports aligned with these findings and according to predictions. These differences in cooperation based on causal models also held across items for the same participant. Finally, causal information superseded temporal cues in affecting behavior.

With nearly two decades of development of Agency Business, the market has experienced a lot of industry up and down. Each time when the market approaches saturation, we always observe the survival drama on the industrial supply chain where the competitions among O.E.Ms are intensive and all are fighting for a limited market. Due to the rapid changes on the high-speed Internet applications with massive global information exchange requirements, revolutionary innovative technology and products are often developed, thus it is expected that network channels industry is still considerable room for growth in the future. Although the revolution of products is expected, in addition to the product's competitive, how to leverage soft power (such as professional and technical services), in the market to seize the initiative and continue to maintain the advantage of competitiveness, is still the subject for the case company to study. We expect by this thesis research to conceive in response to the vigorous development of modern information applications, of which case companies will face issues and challenges, such as: 1. Agency and brand resources coordinating and competing 2. Upstream, downstream and alliance companies¡¦ value chain relationships and competing strategies 3. Agency and OEM branding and product conflict 4. The changes of demand side such as new technologies and applications that may impact the assessment of the industry supply chain and coping strategies Based on three dimensions: industry trends, supply chain competing, internal allocation of resources with the long-term observation of the development of the case company, the internal executives in-depth interviews and secondary data collection methodologies, this research is to explore the case companies¡¦ response to strategy with the result, also try to analyze the feasibility of taking advantage of business operation management (five forces analysis / value network / game theory), to seek the best strategy for the case company in response to the rapidly changing business competition.

Prior research on the strength of embeddedness ties in strategic networks in influencing innovation performance has produced inconsistent conclusions. In this paper, drawing on an investment perspective on firms¡¦ decision behavior, we argue that the ¡§control benefits¡¨¡Xanother characteristics of strategic networks¡Xalso affects firms¡¦ innovation performance. According to previous research, we adopt the speed of ¡§patent application¡¨ and ¡§market introduction of a new product¡¨ to measure innovation performance. Furthermore, we divide firms¡¦ innovation strategies into ¡§apply for a patent and introduce the new product to market later¡¨, ¡§patent the innovation and market introduction immediately¡¨ as well as ¡§introduce the new product to market and apply for a patent later¡¨. We examine the relationship between the strength of enbeddedness ties and firms¡¦ innovation performance using the theoretical frames of game theory and real options. After the analysis of Cournot duopoly game model and real options approach, several findings are acquired as follows: (a) the higher the strength of embeddedness ties, the more likely the firm is to abandon the innovation strategy ¡§apply for a patent and introduce the new product to market later¡¨ and adopt innovation strategies ¡§patent the innovation and market introduction immediately¡¨ or ¡§introduce the new product to market and apply for a patent later¡¨; (b) if the firm adopts the innovation strategy ¡§apply for a patent and introduce the new product to market later¡¨, then the strength of embeddedness ties has a positive effect on the speed of market introduction of the new product, but the relationship between the strength of embeddedness ties and the speed of patent application is not sure; (c) if the firm adopts innovation strategies ¡§patent the innovation and market introduction immediately¡¨ or ¡§introduce the new product to market and apply for a patent later¡¨, then the strength of embeddedness ties has both positive and negative impact on the speed of ¡§patent application¡¨ and ¡§market introduction of a new product¡¨, and therefore the relationship between the strength of embeddedness ties and the innovator¡¦s innovation performance is indeterminable. The research findings indicate that the innovator may delay the application for patent or postpone the launching of a new product because of the ¡§control benefits¡¨ derived from different strength of embeddedness ties. These results have broad implications for future research on strategic networks and innovation.

Turkish Electricity Market is modeled as a non-cooperative game with complete information in order to simulate the behavior of market participants and analyze their possible strategies. Player strategies are represented with multipliers in a discrete strategy set. Different market scenarios are tested through different game settings. As the novelty of this thesis, similar market participants are clustered and treated as single players in order to apply game theory in an efficient way. Generators are clustered using Agglomerative Hierarchical Clustering and Square Sum of Deviations is used as the proximity measure. The game is constructed with three players that reflect the main characteristics of the market participants. Clusters and game scenarios are constructed using the real market data of the Turkish Electricity Market at four different time points in 2008 and results are compared. Clustering results reflect the actual installed capacity distribution based on the main companies and fuel types in Turkish Electricity Market. According to four games of clustered electricity generators, when there is not enough competition in the market, dominant player is advised to submit bids with lower price for energy surplus cases and offers with higher price for energy deficit cases. However, when there is competition in the market, players are advised to submit offers with lower price in order to take a share of the limited demand for up-regulation.

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The high flexibility, autonomy as well as profitability of information service industries have been playing an important role in Taiwan industry and economy transformation. While information service businesses in Taiwan tend to be small scale and have limited funds, a range of industries, such as semiconductor and communication industry, have relied on powerful software to enhance the value added. In effect, information service industry also has become the leading industry in the knowledge-based economy. More specifically, its market size and growth rate of global software industry have exceeded hardware industry. As a result, we expect that the Taiwan information service industry which is based on co-opetition business model can enhance the industrial upgrades and further lead to economic growth in Taiwan. There is some superiority of Taiwan in terms of information industry developments, including well-developed information infrastructure, superior global logistic ability and geographical position, highly qualified and experienced human resources and so on. Furthermore, the information digitalization, economy globalization as well as the rising of Asia Pacific region also provide Taiwan with a great deal of new business models and opportunities for its information industry developments. Due to small market size and the decreasing growth rate of GDP in Taiwan, near half of the information service firms have experienced decline in profitability. However, many of the information service companies reinforce their ability to make a profit by adjusting operation models as well as constructing value net. For instance, according to MIC (2006), the exportation of system integration will grow over 30% by 2009, and 70% of the growth will come from China. Therefore, the information service firms in Taiwan should carefully analyze their internal core resources and uniqueness to develop core competency which can sustain their competitive advantages. Based on resource based theory, game theory, and the value net concept proposed by Brandenburger & Nalebuff (1955), this research used case studies and secondary data which collected from some professional institutions to analyze how do firms take the interactions between customers, suppliers, and substitutes into account when they are making strategies, changing or expanding value net as well as innovating operation models to create uncontested market space. Our research suggest that as the investments of Taiwan information service industry are more likely to be firm specific, due to their products and services characteristic. Consequently, the information service firms in Taiwan need to ally themselves with hardware manufacture industry to obtain competitive advantages in the global market. Specifically, we need to gain resources through constructing dynamic value net which in turn increase productivity, and adjust strategies flexibly to create more preferable business environment. By outsourcing and strategic alliance, companies are able to obtain partners¡¦ competitive advantages, and create a win-win business environment. Also, those companies that adopt the concept of game theory to build vale nets can create a win-win strategy that is beneficial for companies and industry¡¦s future developments. Key workds¡GInformation service industries in Taiwan, Resource based theory, Game theory, Value net

The objectives of this research are to extend cooperative control methods based on potential games to dynamic environments and to develop an experimental test bed to illustrate theoretical results. Cooperative control concerns coordinating a collective performance of multiple autonomous agents. Possible applications include mobile sensor networks, distributed computation, and unmanned vehicle teams. Prior work has explored game theory, specifically the framework of potential games, as an approach to cooperative control, but has been restricted to static environments. This research shows that potential game based cooperative control also can be applied to dynamic environment problems. The approach is illustrated on three example problems. The first one is a moving target tracking problem using a modified form of the learning algorithm, restrictive log-linear learning. The second example is mobile sensor coverage for an unknown dynamic environment. The last example is multi-agent path optimization using payoff based learning. The performances of the developed systems are studied by simulation. The last part of this thesis develops an experimental moving target tracking system using multiple mobile robots. Finally, the thesis concludes with suggestions for future research directions.

<p>      Organizational change and game theory were separately investigated over time. Due to lack of scientific research on the relationships of those two fields of knowledge, an investigation of the game theoretic applications in managing change was performed in this research. Game theoretic applications were structured concerning the analytical use of game theory, strategic formulation with game theory and equilibrium analysis. By a qualitative flexible research method, main problematic areas of organizational change were identified with suitable game theoretic applications. Those problem areas are: making cooperation and coalition in change, group dynamic difficulties and the problem of incentive rewards. In each problem area, game theoretic solutions were discussed to help managers to make better decisions. Four mechanisms were inferred to support the game theoretic analysis of change management problems. Those mechanisms are: sub games, practical games, specific modeling and behavioral studies of games. Finally, an instructional framework was developed to conclude findings and illuminate the game theoretic approach in organizational change.</p>

Thesis (Ph. D.)--University of Missouri-Columbia, 2000. / Typescript. Vita. Includes bibliographical references (leaves 209-222). Also available on the Internet.