Selling checkmarks

Organised by

• Department of Economics

We study a social media platform that is monetized through selling "verified" status to content providers. Providers on the platform come in two types, ones that are valued by content consumers and ones that are not. The platform can observe and potentially verify this type, as well as steering content. Providers value attention from consumers; consumer attention depends on a producer's "verified" status and on the equilibrium mix of providers with that status. We show that verification plays a role even conditional on content provision. We further show that selling status can increase consumer's payoff relative to a benchmark where verification is perfect but traffic is for sale. Finally, we highlight fundamentals of platforms that influence whether verified status is for sale, or verification is mostly correct.

Co-authors: Heski Bar-Isaac and Rahul Deb, University of Toronto