Addictive Platforms

We study competition for consumer attention in which platforms can sacrifice service quality for attention. A platform can choose the “addictiveness” of its service. A more addictive platform yields consumers a lower utility of participation but a higher marginal utility of allocating attention. We provide conditions under which increased competition can harm consumers by encouraging platforms to offer low-quality services. In particular, if attention is scarce, increased competition reduces the quality of services because business-stealing incentives induce platforms to increase addictiveness. Restricting consumers’ platform usage may decrease addictiveness and improve consumer welfare. A platform’s ability to charge for its service can also decrease addictiveness. This paper was accepted by Joshua Gans, business strategy.

• 저널Management Science · 69(2) · 1127–1145
• 토픽Digital Platforms and Economics · Strategy and Management
• DOI10.1287/mnsc.2022.4392
• 저자Shota Ichihashi, Byung‐Cheol Kim