Addictive Platforms

Abstract

We study competition for consumer attention in which platforms can sacrifice service quality for attention. A platform can choose the “addictiveness” of its service. A more addictive platform yields consumers a lower utility of participation but a higher marginal utility of allocating attention. We provide conditions under which increased competition can harm consumers by encouraging platforms to offer low-quality services. In particular, if attention is scarce, increased competition reduces the quality of services because business-stealing incentives induce platforms to increase addictiveness. Restricting consumers’ platform usage may decrease addictiveness and improve consumer welfare. A platform’s ability to charge for its service can also decrease addictiveness. This paper was accepted by Joshua Gans, business strategy.

Performance investment and price decisions of two‐sided platforms under multiple quality regulation strategies

“…An important but understudied issue of platform governance is to regulate the service quality of the platform (Hagiu, 2009). To attract the consumers, a platform needs to offer high service quality (Ichihashi & Kim, 2022). In the early 1980s, the collapse of the video game market highlights the importance of quality regulation.…”

Unleashing the power of big data for platform firms: A configuration analysis

“…Finally, the present study makes a noteworthy contribution to the measurement of the multidimensionality of big data resources in platform firms through the utilization of operational data of the app in question. The competition for data has emerged as a central focus in research on platform performance (Armstrong, 2006; Ichihashi & Kim, 2023; Teh, 2022), however, the cross‐border operations of platforms have resulted in increasingly blurred boundaries, presenting significant obstacles for the collection of empirical data. This has led to a paucity of empirical research in the realm of platform enterprises and big data.…”

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Platform investment and creators' quality choice

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