Platform Liability and Innovation

Efficient Copyright Filters for Online Hosting Platforms

“…We offer a different perspective to a similar topic by focusing on the design of regulation and liability. More closely related to our paper is Jeon et al (2021) who study a platform's incentive to screen out trademark-infringing content and its effect on sellers' innovation investments. The modeling set-ups are sharply different as the two papers aim to capture features of different types of platforms: their model is better suited to study online marketplaces and app stores, whereas our paper better applies to online hosting platforms, such as YouTube.…”

Platform design biases in ad‐funded two‐sided markets

“…When the marginal cost is low or even zero as in the digital markets, this implies that the optimal price can be negative. However, negative prices can invite opportunistic behaviors by consumers due to various moral hazard and adverse selection reasons (Farrell and Gallini, 1988, Armstrong and Wright, 2007, Amelio and Jullien, 2012, Choi and Jeon, 2021 and Jeon et al., 2023). In such a scenario, negative prices are impractical and the platform is constrained to set the price at zero.…”

“…Our article contributes to the recently emerging literature on platform design that has studied the incentives of digital platforms on various key issues of governance as a gatekeeper. They include incentives to delist low‐quality sellers (Casner, 2020) or IP‐infringing sellers (Jeon et al., 2021), to curate apps (Etro, 2021), to introduce deceptive features (Johnen and Somogyi, 2021), to choose the intensity of seller competition (Johnson et al., 2021; Teh, 2022), and to moderate content (Liu et al., 2022; Madio and Quinn, 2021) among others. Our article is most closely related to Teh (2022) and Etro (2021).…”