This paper develops a theoretical model of platform competition where user-generated content (UGC) quality arises endogenously from the composition of the user base. Users differ in their relative preferences for content quality and network size, and platforms compete by choosing advertising intensity, which affects user utility through perceived quality. We characterize equilibrium platform choice, identifying conditions under which equilibria are stable. The model captures how platforms' strategic decisions shape user allocation and market outcomes, including coexistence and dominance scenarios. We consider two types of equilibria in advertising levels: Nash equilibria and Stackelberg equilibria, and discuss the industry and policy implications of our results.
@article{arxiv.2512.08876,
title = {Platform Competition with User-Generated Content},
author = {Bohan Zhang},
journal= {arXiv preprint arXiv:2512.08876},
year = {2026}
}
Comments
Accepted for presentation at the 8th International Conference on Management Science and Industrial Engineering (MSIE 2026), Krabi, Thailand, April 23-25, 2026. Forthcoming in September