Webinar: Platform Competition and User-Generated Content: Evidence from Game Wikis

ABSTRACT

Today, many platforms rely on contributions by users to create value. While they play an increasing role in today’s digital economy, little is known about how dominant user-driven platforms emerge and what determines the production of content here. We aim to extend our understanding of this phenomenon by studying the relationship between the level of competition and user activity. We argue that a platform’s competitive position influences user behavior through two mechanisms: First, a more dominant position entails more favorable beliefs, leading to increased activity at the extensive margin, i.e. a higher number of users. Second, the level of competition affects the non-pecuniary benefits users can derive, impacting their activity at the intensive margin, i.e. how much and how frequently each contributes. We study these dynamics in the context of two competing game wiki platforms and exploit content updates as a source of exogenous variation in a quasi-experimental research design. We find that a more dominant position is associated with higher levels of user activity and productivity in aggregate, which is primarily driven by the extensive margin of content creation. In addition, this creates spill-overs in the form of higher social benefits, leading to increased activity at the intensive margin, which is especially pronounced for highly-productive users.

Professor Dr. Tobias Kretschmer is professor of Management and Director of the Institute for Strategy, Technology and Organization (ISTO) at the Ludwig-Maximilians-Universität (LMU) in Munich. Prior to joining LMU in October 2006, he was a lecturer in Strategy and Economics at London School of Economics (2001 – 2006) and a research fellow at INSEAD, France (2000 – 2001). He holds a PhD in Economics from London Business School and an MSc in Strategy and Organisation from theUniversity of St. Gallen, Switzerland.

Professor Kretschmer’s work spans the economics and management of high-technology industries and the impact of managerial and organisational practices and Information and Communications Technologies (ICT) on firm productivity. He is a Research Affiliate at the Centre for Economic Performance at LSE and an Adjunct Professor at the University of Southern Denmark. His work has appeared or is forthcoming in several leading journals such as as American Economic Review, Strategic Management Journal, Organization Science, International Journal of Industrial Organization, Economic Inquiry, Review of Industrial Organization, and Journal of Industry, Competition and Trade. He is associate editor of the International Journal of Industrial Organization and Coeditor of Information Economics and Policy.