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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/31407
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| Title: | An Equilibrium Model of User Generated Content |
| Authors: | Ahn, Dae-Yong
Duan, Jason
Mela, Carl |
| Issue Date: | 21-Dec-2011 |
| Series/Report no.: | NET Institute Working Papers;11_13 |
| Abstract: | This paper considers the joint creation and consumption of content on
user generated content platforms (e.g., reviews or articles, chat,
videos, etc.). On these platforms, users’ utilities depend upon
the participation of others; hence, users’ expectations regarding
the participation of others on the site becomes germane to their own
involvement levels. Yet these beliefs are often assumed to be fixed.
Accordingly, we develop a dynamic rational expectations equilibrium
model of joint consumption and generation of information. We estimate
the model on a novel data set from a large Internet forum site and use
the model to offer recommendations regarding site strategy. Results
indicate that beliefs play a major role in UGC, ignoring these beliefs
leads to erroneous inferences about consumer behavior, and that these
beliefs have an important implications for the marketing strategy of UGC
sites. We find that user and site generated content can be either
strategic complements or substitutes depending on whether the
competition for existing readers exceeds the potential to attract new
ones. In our data, the competitive effect substantially dilutes the
market expansion effect of site generated content. Likewise, past and
current content can also be either strategic substitutes or complements.
Results indicate more durable content increases overall site
participation, suggesting that the site should invest in making past
information easier to find (via better search or page design). Third,
because content consumption and generation interact, it is unclear which
factor dominates in network growth. We find that decreasing content
consumption costs (perhaps by changing site design or via search tools)
enhances site engagement more than decreasing content generating costs.
Overall, enhancing content durability and reducing content consumption
cost appear to be the most effective strategies for increasing site visitation. |
| URI: | http://hdl.handle.net/2451/31407 |
| Appears in Collections: | NET Institute Working Papers Series
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Files in This Item:
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Size | Format |
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| 11_13.pdf | NET Institute Working Paper 11_13 | 662.54 kB | Adobe PDF | View/Open |
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