Romesh Vaitilingam, 06 January 2021

The US Federal Trade Commission and 46 states have brought antitrust cases against Facebook, which could potentially require the company to unwind its acquisitions of Instagram and WhatsApp. The IGM Forum at Chicago Booth invited its panels of leading US and European economists to express their views on whether requiring the company to make these divestments is likely to make society better off. As this column reports, a considerably larger proportion of experts on the European panel agree or strongly agree with the statement than the US panel (78% compared with 59%); nearly a quarter of US experts are uncertain; and just over a sixth of US experts disagree.

Klaus Desmet, Ignacio Ortuño-Ortin, Ömer Özak, Nick Obradovich, Ignacio Martín, Edmond Awad, Manuel Cebrían, Ruben Cuevas Rumin, Iyad Rahwan, Ángel Cuevas Rumin, 31 October 2020

By allowing us to peer into the lives of billions of people, social media has inadvertently created the world’s largest dataset for the measurement of culture. This column argues that by providing quantitative, scalable, high-resolution, and cost-effective measures of revealed cultural distances between populations, it has enormous potential to help social scientists answer some of society’s most pressing issues. These include the persistence of ethnic conflict, the growing fragmentation of society, and the fraying of the social fabric. Cultural distances are also essential to our understanding of trade, migration, and investment flows.

Rabah Arezki, Alou Adesse Dama, Simeon Djankov, Ha Nguyen, 20 July 2020

Street protests propagate across borders. This column provides evidence for contagious protests, using both actual and news-based measures of protests. The results point to social media as a vehicle for contagion.

Elena Argentesi, Paolo Buccirossi, Emilio Calvano, Tomaso Duso, Alessia Marrazzo, Salvatore Nava, 04 March 2020

Dominant companies in the digital market may use merger and acquisitions – especially ‘killer’ or ‘zombie’ acquisitions – and the (under)enforcement of merger control to stifle competition and cement their market dominance. This column analyses acquisition activity by Amazon, Facebook, and Google between 2008 and 2018, and finds that they often targeted very young firms. Because the evolution of young firms is still uncertain, it is difficult for competition authorities to assess the effects of these mergers, especially when the focus is on single acquisitions without considering the overall acquisition strategy.

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.


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