Content Quality Assurance on Media Platforms with User-Generated Content

This paper develops a duopoly model for user-generated content (UGC) platforms, which compete consumers and producers in two-sided markets characterized by network externalities. Each platform has the option to invest quality assurance (CQA) system determine level of advertising. Our reveals that effects are pivotal shaping platforms’ optimal strategies user behavior, specifically terms single vs. multi-homing. We find when weak, tend engage multi-homing while prefer single-homing. Conversely, strong lead opposite behavior. Furthermore, our demonstrates behavior dictate whether is incentivized incorporate advertisements and/or CQA. Generally, weak prompt CQA system, unless both model’s results highlight importance companies evaluate extent on their order anticipate subsequently informs advertising strategy.