Stable streaming platforms: a cooperative game approach

L. Schlicher, Bas Dietzenbacher and Marieke Musegaas
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Bas Dietzenbacher: RS: GSBE other - not theme-related research, QE Math. Economics & Game Theory
Marieke Musegaas: Dept. of Advanced Computing Sciences, RS: FSE DACS Mathematics Centre Maastricht, RS: FSE DACS

No 1, Research Memorandum from Maastricht University, Graduate School of Business and Economics (GSBE)

Abstract: Problem definition: Streaming platforms such as Spotify are popular media services where content creators may offer their content. Because these platforms operate in a highly competitive market, content creators may leave the platform and join elsewhere. This paper studies conditions under which content creators have no incentives to leave the platform and thus stability can be preserved. Methodology/results: We introduce a stylized model for streaming platform situations and associate these situations with a cooperative game. We focus on the (non)emptiness of the core to analyze the stability of the streaming platforms. It turns out that both stable and unstable streaming platforms exist. We show that for streaming platforms operating in a market where users have completely opposite streaming behavior, stability cannot always be preserved. However, in markets where users are more similar in their streaming behavior, stability can be preserved. We further analyze the stability of streaming platforms by means of numerical experiments. Our results indicate that stability of streaming platforms generally is a delicate matter. Managerial implications: Streaming platforms are more likely to be stable in markets where users are similar in their streaming behavior. To avoid that content creators leave the platform, it is therefore recommended to focus on particular market segments where these similarities occur.

JEL-codes: C71 (search for similar items in EconPapers)
Date: 2023-01-26
New Economics Papers: this item is included in nep-gth and nep-pay
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Persistent link: https://EconPapers.repec.org/RePEc:unm:umagsb:2023001

DOI: 10.26481/umagsb.2023001

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