ABSTRACT
We model the economics of incentivizing high-quality user generated content (UGC), motivated by settings such as online review forums, question-answer sites, and comments on news articles and blogs. We provide a game-theoretic model within which to study the problem of incentivizing high quality UGC, in which contributors are strategic and motivated by exposure. Our model has the feature that both the quality of contributions as well as the extent of participation is determined endogenously in a free-entry Nash equilibrium.
The model predicts, as observed in practice, that if exposure is independent of quality, there will be a flood of low quality contributions in equilibrium. An ideal mechanism in this context would elicit both high quality and high participation in equilibrium, with near-optimal quality as the available attention diverges, and should be easily implementable in practice. We consider a very simple elimination mechanism, which subjects each contribution to rating by some number A of viewers, and eliminates any contributions that are not uniformly rated positively. We construct and analyze free-entry Nash equilibria for this mechanism, and show that A can be chosen to achieve quality that tends to optimal, along with diverging participation, as the number of viewers diverges.
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