Abstract
in this paper, the commission allocation mechanism between the mobile application store and the mobile application developer is studied under the game theory. Firstly, based on the non-cooperative game theory, the paper researches the equilibrium solution of the inter-firm game under the conditions of different sales scale, and then extend the study to the circumstance of infinite game. In addition, the paper analyzes the Pareto improvement achieved by choosing cooperative strategy of strategic alliance from different parts. Finally, problem of the commission allocation problem is resolved.
Highlights
Apple Corporation announced part of its Apple Store sales data in Sept, 2016, it showed that over 0.7 billion iPhone, iPad and iPod’s global user had downloaded totally 140 billion applications through the Apple Store
Through reviewing various mobile phone’s application stores and the application developer’s payment allocation model, it is discovered that most application store seek a fix percentage of commission from the developer’s application sales
Base on the current fix commission basis, is this sufficient to motivate application developer to provide high quality application? Does the commission vary between higher qualities versus normal qualities application developers? How does the total income change if both parties formed strategic alliance cooperation? How does the commission allocated reasonably between both parties? This article will analyze and provide answer to these questions
Summary
Jeuland and Shugan(1983), Monahan(1984), Moorthy (1987), Cachon and Lariviere(2005) and other scholars suggested various methods to coordinates both parties through the studies of cooperation model between the marketing channel and upstream supplier. Graham (1999), Landeros (1995) and other scholars continued to expand the studies regarding the above literature review that discussed issues on cooperation model between the marketing channel and supplier They emphasized that the importance of promise and effectiveness in optimizing relations. Coughlan (2001) pointed out that both parties will have great difficulties to perform a full cooperation if upstream supplier and downstream retailer both position themselves in a rational supposition that only pursues own benefit maximization. Under this circumstances, it would be a challenge to optimize the returns of the overall supply chain. This article attempts to have the different view on these two new perspectives
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