Design of Contract-Based Sponsorship Scheme in Stackelberg Game for Sponsored Content Market

Per sponsored content policy, a content provider can pay the network operator on behalf of mobile users to lower the data usage fees so as to generate more advertising revenue. Under such a scheme, how to offer proper sponsorship to the users in response to varying data prices becomes an important issue. Furthermore, the information asymmetry between the content provider and users makes the problem more challenging. In this paper, we propose a Stackelberg game based framework to tackle this challenge. In the framework, the network operator determines the data price first as the leader of the game, and the content providers as well as users make the decisions based on the data price as the followers. Specifically, the decision making process of the followers with the presence of asymmetric information is formulated as a contract game. In the contract game, the content provider designs a contract that contains sponsoring strategies toward all types of the users. After obtaining the optimal contract that maximizes the profit of the content provider, we also derive the optimal pricing of the network operator through backward induction. The Stackelberg equilibrium is proved to be unique, and numerical results are presented for performance evaluation.