A Dynamic Model for Native Advertising

Explore a dynamic model for native advertising in this 48-minute webinar from the Dynamic Games and Applications Seminar series. Delve into the intricacies of native advertising as a marketing tool that mimics regular platform content, examining its effectiveness and potential negative impact on media credibility. Analyze the trade-off faced by high-quality content communication platforms between profit from native advertising and loss of credibility. Understand the problem formalization as a Stackelberg infinite-time horizon differential game, with the media outlet as the leader. Learn about the time-consistent open-loop equilibrium and conditions for optimal native advertising acceptance. Investigate the effects of native advertising, credibility concerns, payoffs, and the Stackelberg differential game structure. Examine follower's best response functions, leader's problem and equilibrium strategies, steady-state credibility, and research question answers. Conclude by exploring the cost of credibility and an open problem in the field.