Spatial media competition under multi-homing (link)
Two media outlets strategically acquire facts via investment and reveal those spin to report an ideologically-neutral or non-neutral issue, balancing ideology and readership. Readers prefer a report if their perception from it is proximate to their ideology, but also the truth if exposed to an independent media. I propose a reader's perception index of a report as a function of investment and spin of the respective outlet, or both outlets if they multi-home (read both outlets' reports). This index identifies unique pure-strategy equilibrium in spin which, by backward-induction determines either unique, multiple or no pure-strategy equilibrium in investment. Under neutral issue, equilibrium perception under neutral outlets is weakly more polarized than outlets with ideology motives, but remains constant across single and multi-homers. Under non-neutral issue, perception maybe more polarized under neutral outlets than ideologically-opposite outlets, but multi-homers derive weakly more polarized perception than single-homers. Welfare analysis highlights when independent media ensures truthful reporting.
Perks of Influence: Personalised benefits in a platform with networks (with Ratul Das Chaudhury) (link)
How should a platform target users when it observes their social-network but not their preferences? We study a platform that monetises \textit{basic} users to varying degrees and uses personalised perks to induce adoption of fee-based \textit{exclusive}-plan. The platform observes users social-network but not their private preference shocks, then posts a subscription fee, and announces costly perks. Optimal perks are larger for influential users because their adoption shifts others’ choices. However, increase in marginal returns from basic reduce perks and adoption of exclusive and increases profit. Preference bias, network strength, and competition further modify perks because adoption and profit can diverge.
Competition under algorithmic ordering: The role of product substitutability (link)
AI-driven recommendation algorithms, based on a consumer’s online activity, ex-pose them to advertisements (ads) of products of certain firms before or more frequently over that of competing firms. This privately makes the product of one firm the consumer’s primary choice. I develop a duopoly model to study how firms, with incomplete information about who is the consumer’s primary choice, strategically invest to increase consumer attention towards their ads. The study highlights how substitutability between products of both firms, as well as the consumer’s cost of consuming content of the secondary firm which goes against their recommender-algorithm, impacts strategic investment. Greater substitutability magnifies the competitive advantage of the primary firm by reducing the marginal value of the secondary firm, which in turn drives the primary firm to reduce investment. This effect can be further magnified by a rise in the consumer’s cost of consuming content against their recommendation-algorithm. When both firms are equally likely to be the consumer’s primary choice, strategic interaction vanishes, so does the effect of product substitutability. In this case, strategic investment is only a function of the consumer’s cost of defying their recommendation algorithm.