UGC creator's video‐generation and program‐participation decisions in the presence of ad‐revenue‐sharing programs

Abstract Video‐sharing platforms commonly implement ad‐revenue‐sharing programs to incentivize UGC creators. This paper constructs a game‐theoretic model to examine a creator's optimal decisions on video‐generation and program‐participation. Results show that participating in the ad‐revenue‐sharing program is not always beneficial to creators. Creators with small follower sizes and moderate creation efficiency may experience reduced payoff when participating in that program because of the resultant substantial decrease in the promotion effort offered by the platform. Moreover, the ad‐revenue‐sharing program is not always effective in motivating creators to engage in video generation or incentivizing creators to improve the quality of their videos.