Prominence-for-Data Schemes in Digital Platform Ecosystems: Implications for Platform Bias and Consumer Data Collection

Not as Good as it Used to Be: Do Streaming Platforms Penalize Quality?

“…It seems clear that the impact that these systems have on consumption makes them an obvious candidate for strategic manipulation. In this spirit, Bourreau et al (2021) studies competition for prominence on digital platforms, comparing bias generated when prominence is gained via monetary or data-based compensation. We distance ourselves from this setting in various ways: first, we capture bias not through manipulation of the search query but through manipulation of the composition of available bundles.…”

“…3 The result is intuitive: since the platform charges a fixed fee to all consumers, she has the incentive to minimize costs once their participation is ensured. The finding speaks in favor of royalties being strategically used to gain prominence on this kind of platform (Bourreau et al, 2021). It is however unclear how this dynamic is affected by vertical differentiation in the products offered.…”

Do search engines increase concentration in media markets?

“…They show that if consumers are sufficiently insensitive to bias, the platform uses the recommendation system to reduce the market power of content providers, and hence to set higher fees to consumers. Bourreau et al (2021) consider a model where content providers can offer to a platform data (rather than money) about their consumers to obtain a prominent position in search results. They examine whether the platform is more biased under a prominence-formoney scheme or under a prominence-for-data scheme, showing that this depends on the marginal revenue from shared data.…”