TL;DR
This paper presents a theoretical model of platform competition involving user-generated content, analyzing how platform strategies influence user base composition, content quality, and market outcomes.
Contribution
It introduces a model where UGC quality depends on user composition and platform advertising strategies, providing insights into equilibrium stability and market dynamics.
Findings
Identifies conditions for stable coexistence and dominance of platforms.
Analyzes equilibrium advertising levels under Nash and Stackelberg frameworks.
Discusses implications for industry and policy decisions.
Abstract
This paper develops a theoretical model of platform competition where user-generated content (UGC) quality arises endogenously from the composition of the user base. Users differ in their relative preferences for content quality and network size, and platforms compete by choosing advertising intensity, which affects user utility through perceived quality. We characterize equilibrium platform choice, identifying conditions under which equilibria are stable. The model captures how platforms' strategic decisions shape user allocation and market outcomes, including coexistence and dominance scenarios. We consider two types of equilibria in advertising levels: Nash equilibria and Stackelberg equilibria, and discuss the industry and policy implications of our results.
Peer Reviews
No public reviews on file for this paper yet. If you reviewed it on a platform where reviews are public (OpenReview, ICLR, NeurIPS, ICML), you can paste yours below so the community can read it here.
Videos
No videos yet. Explain this paper in a talk, walkthrough, or lecture? Add one.
Taxonomy
TopicsDigital Platforms and Economics · Consumer Market Behavior and Pricing · ICT Impact and Policies