Differentiation with User-Generated Content

@article{Zhang2015DifferentiationWU,
  title={Differentiation with User-Generated Content},
  author={Kaifu Zhang and Miklos Sarvary},
  journal={Manag. Sci.},
  year={2015},
  volume={61},
  pages={898-914}
}
This paper studies competition between firms whose “products” content are generated by their customers users. Video sharing sites, social networks, online games, etc. all rely heavily on user-generated content and have been growing significantly in the last decade. We model a Hotelling style market in which consumers have heterogeneous tastes along a circular city. In a first step, we consider two ex ante identical firms whose offerings entirely depend on user-generated content. Consumers… 

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