{"title":"The Quality of Interactions in Competition Between Social Media Platforms","authors":"Ido Eisdorfer","doi":"10.1515/rne-2023-0068","DOIUrl":null,"url":null,"abstract":"Social media platforms are content-based platforms in which agents invest efforts to produce and share content while interacting with one another. The central question involves the trade-off between interaction quantity and content quality, and its impact on competition between an incumbent platform with a focal advantage and a high-quality new entrant seeking market entry. The study focuses on an agent’s utility function, examining the interplay between these factors and exploring strategies for platform decision-makers to maximize profits and benefits for their agents. The findings show that a high-quality non-focal platform has a strategic advantage in winning the market when agents prioritize content quality over the quantity of interactions. Policymakers should take into account the quality-driven impact on market efficiency and entry barriers.","PeriodicalId":45659,"journal":{"name":"Review of Network Economics","volume":"67 1","pages":""},"PeriodicalIF":0.9000,"publicationDate":"2024-04-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Review of Network Economics","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1515/rne-2023-0068","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
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Abstract
Social media platforms are content-based platforms in which agents invest efforts to produce and share content while interacting with one another. The central question involves the trade-off between interaction quantity and content quality, and its impact on competition between an incumbent platform with a focal advantage and a high-quality new entrant seeking market entry. The study focuses on an agent’s utility function, examining the interplay between these factors and exploring strategies for platform decision-makers to maximize profits and benefits for their agents. The findings show that a high-quality non-focal platform has a strategic advantage in winning the market when agents prioritize content quality over the quantity of interactions. Policymakers should take into account the quality-driven impact on market efficiency and entry barriers.
期刊介绍：
The Review of Network Economics seeks to help policy makers, academics, and practitioners keep informed of new research and policy debate in network economics and related subjects that are relevant to the study of network industries. By publishing high quality research on topical issues relevant to network industries, it is hoped readers will be able to gain a deeper understanding of the economic issues involved and that this will improve the quality of decision making by private and public organisations, and debate among researchers. The articles can cover specific network industries, or may deal with general issues that have relevance to a number of different network industries, including topics in the economics of networks, regulation, competition law, or industrial organisation. Papers that provide insights into policy debates are especially welcome, as are up-to-date surveys, book reviews, and comments.
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