TY  - RPRT
        AU  - Cai, Xiaoming
AU  - Gautier, Pieter A.
AU  - Wolthoff, Ronald P.
        TI  - Platform-Controlled Search  and Distortions in Attention Allocation
        PY  - 2026/Jun/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 18745
        UR  - https://www.iza.org/index.php/publications/dp18745
        AB  - Digital platforms allocate buyer attention across sellers that differ in quality and breadth of appeal. We study a monopoly platform that sets meeting rates between buyers and two seller types --- niche sellers whose high-quality good is valued by a fraction  of buyers and mass-market sellers whose good is valued by all. Sellers compete by posting prices à la Burdett and Judd (1983), so buyer surplus requires competition, while platform revenue requires seller rents. This difference creates a systematic distortion: as search capacity grows, the platform keeps high-quality niche attention just past the point where extra exposure stops creating rents and starts eroding them — its saturation point — and diverts the rest to mass-market sellers.  Applying the model to Amazon product search and Google passage-ranking data indicates that, for captive buyers, both platforms operate past the saturation point, with buyer-surplus losses of 63 and 44 percent of the planner’s benchmark, respectively. Allowing buyer participation to respond to the platform's recommendation strategy disciplines the platform and shrinks this loss.
        KW  - two-sided markets
KW  - search frictions
KW  - recommendation systems
KW  - attention allocation
KW  - enshittification of internet
        ER  -