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Moderation as Strategy : How Content Decisions Shape Ideological Differentiation in Digital Platform Competition

Author

Listed:
  • Khaw, Rachel

    (Monash University)

Abstract

This thesis develops a theoretical model of digital platform competition in which moderation choices endogenously generate ideological differentiation. Competing platforms decide which content providers to host, trading off advertising revenues against moderation costs, while consumers sort by ideological proximity and content variety. In equilibrium, breadth competition cancels out, leaving ideological tilt as the key dimension of differentiation. Polarisation emerges as the most robust equilibrium, maximising platform profits but welfare-reducing for moderates, while generalism is socially optimal but privately fragile. By modelling ideology as the outcome of moderation intensity rather than an exogenous stance, the paper clarifies how moderation incentives shape polarisation, welfare, and regulatory trade-offs.

Suggested Citation

  • Khaw, Rachel, 2026. "Moderation as Strategy : How Content Decisions Shape Ideological Differentiation in Digital Platform Competition," Warwick-Monash Economics Student Papers 98, Warwick Monash Economics Student Papers.
    • Handle: RePEc:wrk:wrkesp:98
    as

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    File URL: https://warwick.ac.uk/fac/soc/economics/research/wmesp/manage/98-khaw.pdf
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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