Incentivizing Online Content Creation Through Platform Designs

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2022-05-01T05:00:00.000Z

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The success of digital content platforms such as YouTube and Twitch depends on the creativity of independent content creators. However, the platform needs to understand how to incentivize content creators to produce high-quality online content. In my dissertation, I explore three platform designs that can incentivize online content creation. In the first essay, I study how the platform shares advertising revenue with content creators and how such revenue sharing design is affected by the nature of competition among the number of creators, the size of customer base and the type of customers. I also examine the implications for profits and welfare and extend the analysis to consider the case when the platform allows consumers to directly donate to the creators. The results show that increased creator competition can lead to higher compensation for the creators, higher content quality, and higher creators’ profits. I also show that the platform pays a higher level of commission to creators when consumer donation is allowed but the consumer donations may lower creators’ profits. In the second essay, I study how different designs of recommendation system can affect content creation, profits, and welfare. Since creators’ revenues depend on their demand, the criteria of demand allocation embedded in the algorithm may influence creators’ content creation behavior. I analyze a model in which the platform designs optimal demand allocation and compensations for competitive content creators. I show that a platform may benefit by deliberately biasing its recommendations to intensify competition between creators and content quality and consumer surplus can increase when the platform designs a recommendation system to maximize its profits instead of recommending the best-fit content to each consumer. Furthermore, the platform tends to be more generous in sharing revenue with content creators when it makes biased recommendations. The third essay of my dissertation looks into the phenomenon of star creators in digital content market. The digital content market heavily relies on top talents who are known as star creators. Star creators produce high-quality content and attract extensive consumer attentions. However, how does the presence of a star creator affect the competition among content creators and therefore affect overall content provision and content consumption has not been answered. We test our theoretical predictions leveraging two exogenous events that occurred on Twitch.tv to causally identify the star exit effect in the empirical context of the booming live streaming industry. Consistent with our theoretical predictions, we find on the content supply side the star exit event leads to a reduction in incumbent non-star creators’ content creation effort as well as a drop in the number of active streaming channels in the related category. Furthermore, our results reveal that the impact of star exit can persist on the content supply side and the content consumption side over months.

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Business Administration, Marketing, Economics, Theory, Economics, Commerce-Business

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