User-Generated Content Platforms: Managing the Relationship Triangle.

This article focuses on the optimal dynamic operational policies of user-generated content (UGC) platforms, which form a relationship triangle among the platform, content creators, and viewers, where the platform provides income to creators, creators supply content to viewers, and viewers generate advertising revenue for the platform. Using a hybrid model combining the Bass diffusion model and the replicator equation from evolutionary game theory, the study formulates the platform's problem as an optimal control problem to analyze policies on promotion, advertising, and revenue sharing across different platform stages. Key findings include a mirroring structure between early- and mature-stage policies, the recommendation for platforms to generously share advertising revenue with creators—sometimes exceeding 100% (loss leading)—and nuanced timing of loss leading shortly after launch rather than immediately. Extensions of the model incorporate celebrity creators, liquidity constraints, paid advertisement removal, sponsored content, and viewer tipping, revealing that these factors largely preserve the core policy structures while offering additional managerial insights, such as the potential for viewer tipping to increase early-stage creator wages. The study provides a comprehensive dynamic framework for managing UGC platforms and highlights unique characteristics of this business model, while noting that competition among platforms remains an area for future research.