Mechanism Design and Innovation Incentive for an Ad-Funded Platform

Shota Ichihashi, Doh-Shin Jeon and Byung-Cheol Kim
Additional contact information
Shota Ichihashi: QUB - Queen's University [Belfast]
Byung-Cheol Kim: UA - University of Alabama [Tuscaloosa]

Working Papers from HAL

Abstract: We study a mechanism design problem of a monopoly platform that matches content of varying quality, ads with dierent ad revenues, and consumers with heterogeneous tastes for content quality. The optimal mechanism balances revenue from advertising and revenue from selling access to content: Increasing advertising revenue requires serving content to more consumers, which may reduce access revenue. Contrary to the standard monopolistic screening, the platform may serve content to consumers with negative virtual values while, to reduce information rents, limiting their access to higher-quality content. Then, an increase in ad protability reduces its incentive to invest in content quality.

Keywords: Ad-funded platform; Mechanism design; Matching; Innovation (search for similar items in EconPapers)
Date: 2025-02-18
Note: View the original document on HAL open archive server: https://hal.science/hal-04953707v1
References: Add references at CitEc
Citations:

Downloads: (external link)
https://hal.science/hal-04953707v1/document (application/pdf)

Related works:
Working Paper: Mechanism Design and Innovation Incentive for an Ad-Funded Platform (2024)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-04953707

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().