Implications of Revenue Models and Technology for Content Moderation Strategies

This paper develops a theoretical model to study the economic incentives for social media platform moderate user-generated content. We show that self-interested can use content moderation as an effective marketing tool expand its installed user base, increase utility of users, and achieve positioning or extreme platform. The optimal strategy differs platforms with different revenue models, advertising subscription. also platform's depends on technical sophistication. Because imperfect technology, may optimally throw away more than Therefore, one cannot judge how is by just looking at strategy. Furthermore, we under does not necessarily benefit from better technology moderation, but subscription does. means models have improve their technology. Finally, draw managerial policy implications our insights.