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Streaming Platform and Strategic Recommendation Bias

Marc Bourreau and Germain Gaudin

No 7390, CESifo Working Paper Series from CESifo

Abstract: We consider a streaming platform which carries content from various upstream content providers. Participating customers face personalized recommendations from the platform and consume a mix of content originating from each provider. We analyze when the platform uses its personalized recommendation system to steer consumers from one content provider to another. We establish the conditions under which the recommendation system allows the platform to credibly threaten upstream providers to steer consumers away from their content in order to reduce their market power. We find that the streaming platform can increase its profit by reducing the royalty rate it pays to content providers through the use of a recommendation system which is strategically biased in favor of the cheaper content.

Keywords: streaming platform; recommendation system; personalization; bias (search for similar items in EconPapers)
JEL-codes: D40 L10 L50 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-com and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14) Track citations by RSS feed

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Journal Article: Streaming platform and strategic recommendation bias (2022) Downloads
Working Paper: Streaming platform and strategic recommendation bias (2021)
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