Volume 22, Issue 4

Social media platforms are content-based platforms in which agents invest efforts to produce and share content while interacting with one another. The central question involves the trade-off between interaction quantity and content quality, and its impact on competition between an incumbent platform with a focal advantage and a high-quality new entrant seeking market entry. The study focuses on an agent’s utility function, examining the interplay between these factors and exploring strategies for platform decision-makers to maximize profits and benefits for their agents. The findings show that a high-quality non-focal platform has a strategic advantage in winning the market when agents prioritize content quality over the quantity of interactions. Policymakers should take into account the quality-driven impact on market efficiency and entry barriers.

In this paper, we investigate the potential consumer savings to U.S. home broadband consumers in cable modem monopoly markets, should fixed wireless access technologies become available as a competitive alternative. We use a Choice-Based Conjoint survey and Hierarchical Bayes estimation to calculate the proportion of home broadband consumers that would switch to a fixed wireless access option if it was made available in a cable modem monopoly market. We then utilize a monopoly pricing model to estimate the downward pricing pressure this competition would place on incumbent cable modem monopoly prices. We find that fixed wireless entry at current prices would convert 18 percent of cable-only households and lead to a 37 percent reduction in the price of cable modem service. We also find entry into non-monopoly markets where a fiber-optic broadband alternative already exists, and find muted conversion rates and price reductions. Our results indicate that the deployment of fixed-wireless access would generate substantial consumer savings in cable modem monopoly markets, which constitute 30 precent all cable modem subscribers in the United States.