<p>This study develops a game-theoretical model to examine strategic pricing and advertising decisions in mobile app markets where developers operate under a platform’s agency-selling mechanism. Unlike prior models that assume platform-controlled advertising, we consider a setting in which developers decide on advertisement intrusiveness and pricing, while platforms retain control over commission rates. The model incorporates consumer heterogeneity in ad aversion and analyzes equilibrium outcomes across three representative market types—uniform, ad averse, and ad tolerant. Our results show that as per-user advertising revenue increases, developers optimally reduce ad intrusiveness and set ad-viewing access prices to zero, thereby expanding reach and maximizing ad-based income. Platforms respond endogenously by lowering commission rates to preserve influence over developer pricing strategies. Notably, ad-averse markets, despite initial resistance, eventually surpass ad-tolerant markets in ad-viewing adoption due to developers’ adaptive behavior. These findings highlight how advertising incentives and consumer heterogeneity jointly reshape monetization strategies and reveal counterintuitive adoption patterns that challenge conventional assumptions in platform economics.</p>