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.

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Jörg Claussen, Tobias Kretschmer and Philip Mayrhofer

6 March 2012     Paper Number CEPDP1133

Download PDF - Incentives for Quality over Time - The Case of Facebook Applications

This CEP discussion paper is published under the centre's Growth programme.