The proliferation of public Wi-Fi hotspots has brought new businesspotentials for Wi-Fi networks, which carry a significant amount of globalmobile data traffic today. In this paper, we propose a novel Wi-Fi monetizationmodel for venue owners (VOs) deploying public Wi-Fi hotspots, where the VOs cangenerate revenue by providing two different Wi-Fi access schemes for mobileusers (MUs): (i) the premium access, in which MUs directly pay VOs for theirWi-Fi usage, and (ii) the advertising sponsored access, in which MUs watchadvertisements in exchange of the free usage of Wi-Fi. VOs sell their ad spacesto advertisers (ADs) via an ad platform, and share the ADs' payments with thead platform. We formulate the economic interactions among the ad platform, VOs,MUs, and ADs as a three-stage Stackelberg game. In Stage I, the ad platformannounces its advertising revenue sharing policy. In Stage II, VOs determinethe Wi-Fi prices (for MUs) and advertising prices (for ADs). In Stage III, MUsmake access choices and ADs purchase advertising spaces. We analyze thesub-game perfect equilibrium (SPE) of the proposed game systematically, and ouranalysis shows the following useful observations. First, the ad platform'sadvertising revenue sharing policy in Stage I will affect only the VOs' Wi-Fiprices but not the VOs' advertising prices in Stage II. Second, both the VOs'Wi-Fi prices and advertising prices are non-decreasing in the advertisingconcentration level and non-increasing in the MU visiting frequency. Numericalresults further show that the VOs are capable of generating large revenuesthrough mainly providing one type of Wi-Fi access (the premium access oradvertising sponsored access), depending on their advertising concentrationlevels and MU visiting frequencies.
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