Managing User-Generated Content: A Dynamic Rational Expectations Equilibrium Approach
Dae-Yong Ahn, Jason A. Duan, Carl F. Mela
Marketing Science · 2016 · Volume 35 · Issue 2
Abstract
This paper considers the creation and consumption of content on user-generated content platforms, e.g., reviews, articles, chat, videos, etc. On these platforms, users’ expectations regarding the amount and timing of participation by others becomes germane to their own involvement levels. Accordingly, we develop a dynamic rational expectations equilibrium model of joint consumption and generation of information. We estimate the model on a novel data set from a large Internet forum site and offer recommendations regarding strategies of managing sponsored content and content quality. Data, as supplemental material, are available at http://dx.doi.org/10.1287/mksc.2015.0937 .
Keywords
user-generated content, marketing strategy, rational expectations, approximate aggregation
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