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Using Game Theory to Trigger Action for Users Exposed to an Advertisement


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דף הלינקדין שלי.

 

 
 
Methodology
The methodology described in this part of the document describes three strategies in the field of
game theory and behavioral economics designed to increase exposure of the application that we
wish to promote with an emphasis on the goal of bringing the end-user to choose – rationally or
irrationally – the app that the methodology promotes.
1) The “Inspector’s Strategy” - Mixed Strategies
This strategy contains a number of elements that can be easily measured; the explanation lies
in the fact that the goal is attaining benefit to the Inspector (we’ll meet him in a moment). This
principle is followed by the mathematical explanation and then a sample implementation of the
advertising mechanism on the application on which it is used.
During the Cold War between the United States and the Soviet Union in the 1960s, these powers
carried out many nuclear tests. The two powers had serious ongoing fears about continued
armament and, as a result, negotiations began between the parties to stop and then oversee the
ceasing of the experiments. A third-party, the UN would serve as the Inspector.
On the one hand, the Russians (“Player A”) were interested in conducting nuclear tests in secret.
On the other hand, the Americans (“Player B”) were interested in sending inspectors to investigate
and find out whether the Russians were in compliance. The essence of the negotiations was the
number of times the Inspectors are allowed to visit and oversee.
Here, then, is how the game opens: Is there one or several times for supervision?
The mathematical explanation underlying the idea is that the benefit to the Russians if they carry
out an experiment that is not revealed is 1, but if the nuclear test is revealed, 0. The benefit to the
Americans in the discovery of a test: 1. Non-discovery, 0.
If the Russians did not perform an experiment at all, their usefulness would be on the axis 1 > β >
0; the usefulness of Americans is about α>1. As the game develops, it becomes clear that in order
to ensure maximum benefit, the Americans should use a mixed strategy in which it draws lots to
select the date for the first inspection, and according to this strategy, it would create the date of
the next one is based on the probability (1-β) / (2-β). In addition, if the Americans decide to reveal
their strategy to the Russians and commit to it, this leads to equilibrium in which the two players
do not profit but the Inspector gets to do his job.
Now, we will take this strategy to our area of interest: On the one hand, there are users who are
exposed to advertising and we urge them to click on it to download the app. That is to say, we
have players: User A (“Player A”), User B (“Player B”), and so on. The number of players in this
strategy must be (>2) as well as an even number.
The “Inspector” is an advertiser who chooses to randomly select players, each assigned a specific
strategy in display advertising in which they are given the option to decide what to do – they “Click
Here” to exercise their right.
The important element in the game is to keep the strategies of each player consistent over time (T
= ~), in order for the Inspector to maximize his profit during the process.
Note: Attention should certainly be paid to the consistency of content in the ads.
 
2. Using a “Love and Work” Strategy
Many experiments have in fact deduced four human principles of investing effort, and are yield
the following structure:
• The effort we invest in doing something does not only have an affect on what we create,
but also it affects us and how we value what we did.
• Working harder makes us love the product more intensely.
• We over-value things that we have created so deeply that we assume that others share
our biased perspective on the same things. When we fail to complete a task in which we
have invested a lot of effort, we tend to be less attached to what we have done.
 
3. Strategy: Fair Division
The user sees on his screen an image of a juicy hamburger, and clicks to see the rules of the game.
A celebrity (say, Kim Kardashian) walks into a restaurant and realized that she left her wallet at
home. She asks if she can join you and if you’d share your hamburger with her.
The terms of the game:
The second player (Kim), is, in accordance to her celebrity, asking for the larger part of your burger.
She will to agree to whatever you give her, but if you grant her more than 60 percent, she loses and
gets nothing. If she (and you) agreed, she receives her prize (her part of the burger) and moves on
to the next step.
The second player does not know about the 60% condition; if she knew, it’d present a fundamental
flaw in the strategy of the game.
Where would you divide the hamburger?
The essence of the game depends on your desire to earn as much as possible, as nobody wants to
end up a loser. As such, this strategy is based on the Nash equilibrium principle, wherein the two
players each will have to agree in order to move forward. Otherwise, they return to the starting
point.

 
 

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