Social Media and the Quality of Content

Using the example of TikTok's seeming advantage over its rivals Instagram and YouTube, we present a new model of viewers' time allocation that has a flexible form and has platforms competing in quality of entertainment rather than prices. The model allows an analysis of a competition policy that increases the substitutability of the platforms. One might, in general, expect that with more competition platforms will compete harder for viewers by offering higher quality. But when one platform has a sufficient cost advantage over the others, the non-advantaged platforms respond to increased competition by decreasing quality. If the goal of competition policy is to prevent dominance by one platform, improving viewers' ability to switch between the different platforms may not be the best policy tool