Attention Platforms, the Value of Content, and Public Policy

Attention Platforms, the Value of Content, and Public Policy

By David S. Evans (Global Economics Group)

This paper shows that two related aspects of attention platforms are important for the sound economic analysis of public policy including antitrust. First, attention platforms generate valuable content. Even though people often don’t pay for content we know by revealed preference that content is valuable because people spend a considerable amount of time, which has an opportunity cost, consuming it. Second, there are pecuniary interdependencies between the demand for advertising and the supply of content. A decrease in the demand for advertising reduces the returns to supplying content and therefore the amount of content provided. Accounting for the value of content and these positive feedbacks cannot determine optimal interventions but failing to do so can result in policies that reduce consumer, as well as advertiser, welfare. The paper then considers the implications of these considerations for public policy, particularly privacy regulation and antitrust enforcement. From the standpoint of promoting consumer welfare, failure to account for the value of content and the pecuniary interdependencies increases the chances that authorities do not intervene when they should and do intervene when they should not.

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