Title: Essays on mobile advertising and commerce
Description: The mobile industry holds the promise of increasing connectivity, productivity, and entertainment as mobile devices become ever more ubiquitous and powerful. Many of the market structures that enable mobile commerce are still under rapid development and afford us opportunities to ask new questions about market design. This thesis examines three such markets and mechanisms that drive advertising platforms and application stores for mobile commerce. In the fit essay, I analyze a mobile web advertising auction that employs a proportional allocation rule in which advertisements are shown with frequencies proportional to the bids. Proportional allocation is used to address the space constraints of the mobile environment and the accompanying ad fatigue. I show that the second-price rule currently used in real-world auctions admits no pure-strategy Nash equilibrium. I propose the use of a first-price rule and prove the existence of a unique pure-strategy Nash equilibrium. This reverses the sponsored search result in which the second-price auction has pure-strategy Nash equilibria while the first-price auction does not. I also show that by tuning a single parameter in the allocation rule, the auctioneer can make trade-offs between revenue and efficiency.

In the second essay, I examine an optimize-and-dispatch scheme for delivering pay-per-impression advertisements in online and mobile advertising. Using traffic predictions based on historical traffic patterns, the platform provider seeks to allocate future inventory to advertisers such that commitments are fulfilled in expectation, and no single advertiser bears too much of the burden if actual traffic diverges from predicted traffic. I propose a maximum entropy approach and provide theoretical analysis and simulation to show how it accomplishes these goals. In the final essay, I analyze the market used in mobile device application stores that enable the widespread distribution of third-party software. I characterize the conditions under which an application store seeking to maximize revenue should rank applications based on revenue versus download volume. I also present empirical data from the Apple iPhone App Store to illustrate some of the general features of this type of market.