Date Added: Jan 2011
The success of any User-Generated Content (UGC) website depends crucially on its asset of content contributors. How firms should invest in the acquisition and retention of content contributors represents a novel question that is particularly important for these websites. The authors develop a Vector Autoregressive (VAR) model to measure the financial values of the retention and acquisition of both content contributors and content consumers. In the empirical application to a C2C marketplace, they find that contributor (seller) acquisition has the largest financial value due to their strong network effects on content consumers (buyers) and other content contributors.