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Moderating Content-Hosting Platforms

Author

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  • Robin Ng

  • Greg Taylor

Abstract

We study how content moderation facilitates communication on online platforms. A sender transmits information to a receiver, exerting effort to signal their truthfulness. Communication fails without moderation because the effort required is prohibitive. Moderation resolves this problem by making effort a more powerful signal of veracity. However, moderation crowds out sender effort, decreasing engagement value of content on the platform. A socially optimal policy may therefore involve limited moderation, but platforms often have an incentive to allow too much false content. We study the interaction between moderation and other strategic platform choices, including a platform’s decision to share revenue with creators, the decision to be a content-hosting platform, and the enablement of AI features.

Suggested Citation

  • Robin Ng & Greg Taylor, 2025. "Moderating Content-Hosting Platforms," CRC TR 224 Discussion Paper Series crctr224_2025_698v3, University of Bonn and University of Mannheim, Germany, revised Jun 2026.
    • Handle: RePEc:bon:boncrc:crctr224_2025_698v3
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    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp698
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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