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Miss Na Liu
Ph.D. candidate in Economics
Department of Economics
Cornell University

This study investigates how commission fee pricing reshapes user-generated content (UGC) platforms operating as multi-sided markets. We analyze a natural experiment in which a major platform removed fees on goods-selling advertisement links in sponsored content. Using market-level difference-in-differences models, we identify three main findings: (1) Advertisers reallocated 13% of placements toward fee-exempt links, demonstrating notable price sensitivity; (2) Platform revenue declined as substitutions outweighed demand expansion; and (3) The fee exemption shifted outcomes on the creator side: content associated with treated advertisers gained three additional interactions per 100 views, primarily driven by top creators. Our work advances information systems research by providing the first causal evidence on how commission fee changes reconfigure multi-sided markets—spanning advertisers, creators, and platform revenues. The findings highlight critical trade-offs: while fee structures steer advertiser behavior, they may inadvertently cannibalize revenue and amplify redistribution among participants in this multi-sided ecosystem. These insights inform platform governance by demonstrating the need to model cross-side effects and balance participation incentives with profitability before implementing pricing policies.