Jailbreaking in closed two-sided platforms

Jailbreaking, which refers to security-cracking behavior targeted at systems, threatens closed two-sided platforms. By allowing customers to access unauthorised content freely, jailbreaking may hurt developers’ enthusiasm and have complicated influences on the platform's profit. We develop an analytical model to investigate jailbreaking's influence on closed platforms. The findings reveal that platforms will tolerate jailbreaking only when the customers’ utility suffers a slight decline after jailbreaking. We also prove that jailbreaking hurts the closed platform's profit. However, when bringing adequate additional benefits for customers beyond free content, jailbreaking can raise the platform's profit. Our results are qualitatively tested in several scenarios. © 2023 Elsevier B.V. All rights reserved.