Daron Acemoğlu, Ali Makhdoumi, Azarakhsh Malekian, Asuman Ozdaglar, 18 November 2019

The Cambridge Analytica scandal highlighted the sophisticated ways social media platforms can allow companies to infer information about users and non-users from shared data. This column shows how correlations between platform users’ and non-users’ characteristics mean companies can obtain data at below equilibrium prices, implying welfare inefficiencies for individuals. The authors make some suggestions of regulations that could improve on these data-sharing inefficiencies for users and non-users of the platforms.

Drew Johnston, Theresa Kuchler, Johannes Stroebel, Arlene Wong, 18 September 2019

Our consumption decisions are affected by our friends, but how large is the effect? The column uses Facebook data to show that when a person buys a new phone, the peer effects that tempt friends to purchase too are large and long-lasting. The effects are strongest for the young and less educated. Peer effects may also cause friends to switch operating systems when they buy new phones.

Wendy C.Y. Li, Makoto Nirei, Kazufumi Yamana, 23 July 2019

Online platforms that provide services at zero monetary cost benefit greatly from the data these transactions generate. This column proposes a new method to value these data, based on firm investments in organisational capital. The method also captures the social value of consumer data. Accurate estimates may guide investment and improve national accounts.

Federica Liberini, Michela Redoano, Antonio Russo, Ángel Cuevas Rumin, Ruben Cuevas Rumin, 07 November 2018

The ways we access news and, with it, the nature of political communication have radically changed since the advent of social media. This column uses a unique dataset that matches individuals to Facebook audiences to examine the extent and intensity of online political campaigns conducted on the site before the 2016 US presidential elections. The social platform had a significant effect in persuading undecided voters to support Trump and in persuading Republican supporters to turn out on election day, but had no effect on Clinton’s side.

Simon Anderson, Øystein Foros, Hans Kind, 15 August 2018

Media platforms traditionally delivered the widest possible audience to advertisers. This column argues that the arrival of digital competition in media has created a battle for ‘exclusive eyeballs’ – a niche audience not shared with competitors. While this increases diversity in the media, it also incentivises media outlets to polarise to attract specific groups, and to create echo chambers to retain them.

Andrea Prat, Tommaso Valletti, 26 July 2018

Competition authorities struggle to evaluate the effect of mergers between social media platforms when prices are zero and standard tools like cross-price elasticities are of little use. This column argues that social media platforms are 'attention brokers' that help incumbents maintain market power in other industries by restricting producers’ targeted access to individual consumers. User overlap is more important as a predictor of competition problems than traditional aggregate usage shares. 

Kimberley Scharf, Sarah Smith, 16 September 2016

The rise of peer to peer (P2P) fundraising – soliciting donations on behalf of a charity for undertaking an activity  – has paralleled the growth of online social networks, but the incentives driving online donation behaviour are still poorly understood. This column examines giving behaviour for a large sample of P2P fundraising projects that individuals promoted to their Facebook friends. A negative relationship is found between the number of friends and donation size. The findings suggest a ‘relational altruism’ motive, where donors give because they care about the person who is raising the money.

Events

CEPR Policy Research