September 21, 2020, 14:00–15:30
Industrial Organization seminar
Many online platforms rely on user-generated content and need to incentivize free effort. In this paper, I investigate if users provide more and better quality contributions when endowed with more autonomy over actions. Using a dynamic discrete choice model, I show that control rights have positive marginal value that is heterogeneous across different types of users, where types are ex-ante identifiable by the platform. I simulate counterfactuals with different delegation designs. Results show that the platform would lose an important share of production and quality of content in absence of delegation.