KOREASCHOLAR

Consumers visiting platforms that host user-generated content (UGC) not only consume content but also generate content by investing time and effort. This paper seeks to examine a UGC platform's content provision strategy: how a UGC platform can motivate consumers to generate UGC and how it can manage the balance between UGC and platform's own content. As UGC and the platform's own content perform the same function, one may be inclined to think that the two types of content are substitutes. Our analysis shows that they could function as strategic complements. This is because increasing the platform's own content provision raises the quality of content on the platform, motivates more consumers to join the platform, and increases the total UGC provision on the platform. The fact that consumers dislike advertising could lead us to believe that consumers will be less motivated to generate UGC if ad space increases. On the contrary, we find that consumers may be motivated to increase UGC provision to make up for the loss in enjoyment and increase the overall quality of contents on the platform. The public good characteristics of UGC could prompt us to think that UGC provision on the platform will be less than the socially optimal level. Our analysis identifies conditions when the total provision of UGC can be more than the social optimum. One may wonder whether it is profitable for a UGC platform to completely dispense with its own content. We find that it is always profitable for the UGC platform to offer some of its own content. This is because when consumers spend more time consuming the content, the platform can monetize their attention and earn higher ad revenue.

• Wilfred Amaldoss(Duke University, USA)
• Woochoel Shin(University of Florida, USA)