Platform investment and creators' quality choice

Abstract

Creative tools on content platforms significantly increase content quantity by reducing entry barriers. However, tools such as TikTok video templates primarily facilitate the production of relatively lower‐quality content, negatively impacting content quality due to creative limitations and style uniformity. Why do some platforms develop these tools while others do not? We develop a game‐theoretic model with monopoly and duopoly scenarios to investigate platform investment decisions concerning these special tools. We find that a platform is only incentivized to invest in facilitating low‐quality content production when the entry barrier is low. Additionally, the investment level may not decrease as users increasingly value high‐quality content. In the duopoly case, platforms may adopt differentiated strategies to mitigate direct competition, especially when users substantially value high‐quality content compared with low‐quality content.