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Abstract:

cover
CEP Discussion Paper
Incentives for Quality over Time - The Case of Facebook Applications
Jörg Claussen, Tobias Kretschmer and Philip Mayrhofer
March 2012
Paper No' CEPDP1133:
Full Paper (pdf)

JEL Classification: L1; L50; O33


Tags: usage intensity; social media; platform management; two-sided markets

We study the market for applications on Facebook, the dominant platform for social networking and make use of a rule change by Facebook by which high-quality applications were rewarded with further opportunities to engage users. We find that the change led to quality being a more important driver of usage while sheer network size became less important. Further, we find that update frequency helps applications maintain higher usage, while generally usage of Facebook applications declines less rapidly with age.