The aim of the thesis is to study the incentives of a single platform or firm to control the generation and diffusion of information on an online social network, and to investigate the effects of information on consumer behaviour and welfare. Two different games are set up and the equilibrium for each game is characterised. The first game builds upon an existing model and establishes a welfare-maximising equilibrium. Further extensions of the model are considered and changes to the results are analysed. The second game newly incorporates the concept of spoilers in a model of pricing of experience goods which have narrative attributes, through an inclusion of reviews that entails a unique combination of a positive informational externality and a possiblility of a negative payoff externality. Results are derived and compared for a number of different cases based on the reviews (with or without spoilers) and consumers' valuations (homogeneous or heterogeneous). The particular role of consumer heterogeneity is identified and its effect on equilibrium strategies, equilibrium outcomes, and consumer welfare are specified. In the conclusion, directions for future research are outlined.
- monopoly pricing
- experience goods
- consumer feedback
- review
- information transmission
- consumer search
- consumer heterogeneity
- display advertising
- social information
- information diffusion
Information on Online Social Networks
Simanjuntak, L. (Author). 31 Dec 2021
Student thesis: Phd