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One of the standard propositions from bread-and-butter economics is that you wouldn’t pay for something you don’t want. You lose nothing by not having it. But this idea gets weird when it comes to branded goods. Not having that Rolex you can’t afford makes you feel like an outcast at the Met Gala. The same logic applies to the teen craving for Air Jordans. It’s a hall of mirrors: You would rather not splurge. Still, you want them because your friends want them because they think all their friends (including you) want them, too.
Social media amounts to Air Jordans on steroids: Many people join it just because others do. But they rather wouldn’t.
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Imagine that social media appears in a community — say, at a university campus (which is where Facebook first showed up). There is a first wave of enthusiastic adopters, eager to share puppy pictures and lame jokes with their buddies on this new thing. The second wave is more “meh” about the experience. But hey, sometimes the jokes are funny.
Then there’s that last batch of adopters. They would prefer to hang with their friends at the mall or the quad. But they don’t have a choice. Everybody else has signed up to Instagram or TikTok. Not joining amounts to severing themselves from their social circle. So these folks cave and, ultimately, pay for something they would prefer wasn’t there. This is, literally, the price of FOMO.
A quick detour to get over the idea that Instagram and the rest amount to free stuff: You are paying for them, just in attention and data rather than cash. Where the new research gets interesting, though, is where it offers real money to people — university students, in fact — to leave the service.
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They value being on the networks. In an experiment run by the researchers, the students demanded to be paid to leave TikTok or Instagram for a month. But the wrinkle appeared with the next question, about the monetary value of having all of their friends drop the networks, too. It turned out that students would actually pay for that.
The researchers found that students on TikTok would be willing to pay $28 for TikTok to disappear from their social circle for a month. The equivalent for Instagram was $10. Being on the networks, in other words, detracted from their lives. But they would be even worse off if they abandoned the network while their friends stayed on. By the way, non-users in the experiment were willing to pay even more for the networks to disappear from existence.
“Users’ utility is negative but would have been even more negative if they didn’t use the platform, which is why they continue using it,” wrote the economists. Kind of like teens who would rather not spend $200 or more on sneakers but do so anyway because all their friends are wearing them.
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Incidentally, this is not about students being naive, lacking self-control and getting addicted. Their decision to stick to social media even if it makes them unhappy is entirely rational. As the researchers wrote, “Our evidence shows the existence of a social media trap for a large share of consumers, who find it individually optimal to use the product even if they derive negative welfare from it.”
The research is not definitive. For starters, the experiment asked people to put a price on leaving social media platforms for only four weeks, not for life. The students in the survey could take the offer like a detox break. Or maybe they surmised they could hop on a different network. Still, the responses suggest that the desire for social media to go away is real.
The researchers present a rather dystopian view of the human condition. Leonardo Bursztyn, one of the economists, from the University of Chicago, said subsequent work found that about half of respondents spent about 2.5 hours a day on activities they wish didn’t exist — mostly involving the internet.
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Their research opens a different dimension in the conversation about the harms of social media. The problem here is not that there are bad things on it. The problem is that it exists at all — sucking social interaction into a narrow funnel, trapping people in a world they would rather not live in.
Graham and Hawley’s fury and Klobuchar’s proposals can’t fix this. This isn’t about stopping porn online. Any solution would have to make it easier for people not to be part of the social network, to reduce the social cost of opting out. Maybe there is some clever trick to make it socially viable to say no.
Or if the senators are really furious, they might go for the nuclear option and ban social media altogether. That doesn’t seem easy. But Americans would be better off.
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The world would be a better place without social media.
I’m not talking about teenage suicide. This is not meant to channel the fury of Republican Sens. Lindsey Graham (S.C.) and Josh Hawley (Mo.) at the chief executives of TikTok, Meta, X (formerly Twitter) and the like for turning a profit off platforms where teens drive themselves to despair.
I make no claims as to whether TikTok might be addictive. Nor is this about the “harmful image exploitation” online and the proliferation of child sex abuse materials on social media that Democratic Sen. Amy Klobuchar (Minn.) wants to stop. It’s not about cracking down on the online illegal drug business.
This is a standard, no-frills proposition from the comparatively staid land of economics: All things considered, social media platforms detract from human welfare.
Several scholars have toyed with this hypothesis. But a group of economists from the University of Chicago, the University of California at Berkeley, Bocconi University in Milan and the University of Cologne come pretty close to nailing it. Basically, they measured what people would pay for these platforms not to exist. It turns out, people would pay a lot.
One of the standard propositions from bread-and-butter economics is that you wouldn’t pay for something you don’t want. You lose nothing by not having it. But this idea gets weird when it comes to branded goods. Not having that Rolex you can’t afford makes you feel like an outcast at the Met Gala. The same logic applies to the teen craving for Air Jordans. It’s a hall of mirrors: You would rather not splurge. Still, you want them because your friends want them because they think all their friends (including you) want them, too.
Social media amounts to Air Jordans on steroids: Many people join it just because others do. But they rather wouldn’t.
Imagine that social media appears in a community — say, at a university campus (which is where Facebook first showed up). There is a first wave of enthusiastic adopters, eager to share puppy pictures and lame jokes with their buddies on this new thing. The second wave is more “meh” about the experience. But hey, sometimes the jokes are funny.
Then there’s that last batch of adopters. They would prefer to hang with their friends at the mall or the quad. But they don’t have a choice. Everybody else has signed up to Instagram or TikTok. Not joining amounts to severing themselves from their social circle. So these folks cave and, ultimately, pay for something they would prefer wasn’t there. This is, literally, the price of FOMO.
A quick detour to get over the idea that Instagram and the rest amount to free stuff: You are paying for them, just in attention and data rather than cash. Where the new research gets interesting, though, is where it offers real money to people — university students, in fact — to leave the service.
They value being on the networks. In an experiment run by the researchers, the students demanded to be paid to leave TikTok or Instagram for a month. But the wrinkle appeared with the next question, about the monetary value of having all of their friends drop the networks, too. It turned out that students would actually pay for that.
The researchers found that students on TikTok would be willing to pay $28 for TikTok to disappear from their social circle for a month. The equivalent for Instagram was $10. Being on the networks, in other words, detracted from their lives. But they would be even worse off if they abandoned the network while their friends stayed on. By the way, non-users in the experiment were willing to pay even more for the networks to disappear from existence.
“Users’ utility is negative but would have been even more negative if they didn’t use the platform, which is why they continue using it,” wrote the economists. Kind of like teens who would rather not spend $200 or more on sneakers but do so anyway because all their friends are wearing them.
Incidentally, this is not about students being naive, lacking self-control and getting addicted. Their decision to stick to social media even if it makes them unhappy is entirely rational. As the researchers wrote, “Our evidence shows the existence of a social media trap for a large share of consumers, who find it individually optimal to use the product even if they derive negative welfare from it.”
The research is not definitive. For starters, the experiment asked people to put a price on leaving social media platforms for only four weeks, not for life. The students in the survey could take the offer like a detox break. Or maybe they surmised they could hop on a different network. Still, the responses suggest that the desire for social media to go away is real.
The researchers present a rather dystopian view of the human condition. Leonardo Bursztyn, one of the economists, from the University of Chicago, said subsequent work found that about half of respondents spent about 2.5 hours a day on activities they wish didn’t exist — mostly involving the internet.
Their research opens a different dimension in the conversation about the harms of social media. The problem here is not that there are bad things on it. The problem is that it exists at all — sucking social interaction into a narrow funnel, trapping people in a world they would rather not live in.
Graham and Hawley’s fury and Klobuchar’s proposals can’t fix this. This isn’t about stopping porn online. Any solution would have to make it easier for people not to be part of the social network, to reduce the social cost of opting out. Maybe there is some clever trick to make it socially viable to say no.
Or if the senators are really furious, they might go for the nuclear option and ban social media altogether. That doesn’t seem easy. But Americans would be better off.
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