Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments February 17, 2023 erstellt
Beschreibung:
In November 2020, Apple announced a reduction in the royalty rate applied to small app developers from 30% to 15%. In March 2021, Google followed suit committing to a similar reform. We analyze the implications of these reforms for the distribution of app quality with a stylized model that assumes heterogeneity in the ability to develop apps. After Apple’s announcement, we empirically find a substantial increase in the number of new apps released on the iOS and Android platforms by solo developers, who supposedly are more likely to conform to the definition of “small app developers.” The launched apps are in the lowest quartile for the number of upvotes and ratings received, indicating a surge in low-quality apps. Consistently, we find that -as a result of the reforms- the likelihood of solo developers launching apps that turn into new ventures declines. We finally show that post-reform, the marginal value of quality certification by external, experienced users increases, suggesting that there are potential costs associated with the increased supply of low-quality apps. We discuss the implications for platform governance and regulation