Content Creation with Spillovers: An Incentive Design Approach
Organizations: Technion—Israel Institute of Technology
Abstract
The rise of AI amplifies the economic phenomenon of positive spillovers: when creators contribute content that can be reused and adapted by LLMs, one creator's effort may improve the content quality of others through recombination. While such spillovers can improve content quality, they also reshape incentives, as creators may reduce effort when they can benefit from others' contributions. We introduce the Content Creation with Spillovers (CCS) model, a game between a platform and strategic creators. In this game, each creator chooses an effort level, and qualities are jointly determined by all creators' efforts. The platform contracts on qualities while seeking to maximize social welfare. We show that standard contest mechanisms can be unstable, and propose a parametrized family of Provisional Allocation mechanisms that guarantee a Pareto-dominant equilibrium. Although optimizing welfare within this family is hard to approximate in general, we develop approximation algorithms whose guarantees hold either deterministically across structured spillover classes or with high probability under random instances.
Figures & tables
| \begin{array}[]{ll}\displaystyle\max_{\mathbf{p}\in\mathcal{B}(\varepsilon)^{N}}\displaystyle\sum_{i\in\mathcal{N}}Q_{i}(y_{i},\mathbf{0}_{-i})\qquad\text{s.t.}\\[6.00006pt] \displaystyle\sum_{i\in\mathcal{N}}p_{i}\leq 1\\[3.99994pt] \displaystyle y_{i}\in\arg\max_{z\in[0,1]}\{p_{i}Q_{i}(z,\mathbf{0}_{-i})-c_{i}(z)\}\quad\forall i\in[N]\end{array} |
Appendix figures & tables3 assets
Supplementary material from the paper’s appendix.
Appendix
Mechanism Design
Mechanism design studies rules for allocating resources and shaping incentives when participants hold private information or act strategically.
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