Attention Platforms, the Value of Content, and Public Policy

28 Pages Posted: 18 Oct 2018 Last revised: 17 Jan 2019

See all articles by David S. Evans

David S. Evans

Global Economics Group; Market Platform Dynamics

Date Written: January 15, 2019

Abstract

This paper shows that two related aspects of attention platforms are important for the sound economic analysis of public policy including antitrust: First, attention platforms generate valuable content. Even though people often don’t pay for content, we know from revealed preference that content is valuable because people spend a considerable amount of time -- which has an opportunity cost -- consuming it. Second, demand for advertising and the supply of content are interdependent. A decrease in the demand for advertising reduces the returns to supplying content and therefore the amount of content that is provided. Accounting for the value of content and these positive feedbacks cannot determine optimal interventions; but failing to do so can result in policies that reduce consumer -- as well as advertiser -- welfare. The paper then considers the implications of these considerations for public policy: particularly privacy regulation and antitrust enforcement. From the standpoint of promoting consumer welfare, the failure to account for the value of content and the ad-content interdependencies increases the chances that authorities do not intervene when they should and do intervene when they should not.

Keywords: media economics, attention markets, ad-supported media, online privacy, economics of advertising, network effects, economics of time, digital platforms

JEL Classification: L10, L14, L40, L41, L42, L51, L82, L86, D12, D13, D18, D21, D23, D62, D85, K21, K23, K40

Suggested Citation

Evans, David S., Attention Platforms, the Value of Content, and Public Policy (January 15, 2019). Available at SSRN: https://ssrn.com/abstract=3261815 or http://dx.doi.org/10.2139/ssrn.3261815

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