Platform design biases in ad-funded two-sided markets.¶
Choi, J. P., & Jeon, D. (2023). Platform design biases in ad-funded two-sided markets. The RAND Journal of Economics, 54(2), 240-267.
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Primes¶
- Severed Accountability Via Unearned Revenue
- The contrast case proves the geometry: a subscriber-funded platform, paid directly by users, has the coupling intact and optimizes for user satisfaction.
This sourceShows that whether a platform is funded by advertisers or able to charge users directly systematically biases its design choices toward the paying side — the formal contrast between advertiser-funded platforms (serving advertisers) and subscriber-funded ones (serving users).
Supported in partVerified against the work's full text
The paper shows a platform free to charge consumers any price designs in a consumer-surplus-favouring way, unlike a price-constrained ad-funded one; it does not model subscriptions as such.
“Without any price constraints, the platform design incentive is CS-biased.”
- The contrast case proves the geometry: a subscriber-funded platform, paid directly by users, has the coupling intact and optimizes for user satisfaction.
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