Page 41 - 33-2
P. 41
NTU Management Review Vol. 33 No. 2 Aug. 2023
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where enters the three terms regarding advertorial fees. Through arithmetic it may
be derived that ( (0 − , where (0 is exactly , the MCN
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company’s profit when the two events are independent. This implies that the MCN
company’s equilibrium choices of the two revenue sharing ratios and will
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remain identical regardless of the value of . Q.E.D.
Proof of Proposition 6. With the new setting, the type-H creator’s problem becomes
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while that of the type-L one becomes
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It is straightforward to see that their equilibrium effort levels will be (
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and (
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The MCN company’s problem may then be formulated by replacing and by
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( and ( in its profit function. By redefining the two parameters and
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defined in Assumption 1 by ( , −
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and −
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