When Product Markets Become Collective Traps: The Case of So...

When Product Markets Become Collective Traps: The Case of Social Media

Explores consumer welfare in social media platforms TikTok and Instagram, revealing significant negative externalities for non-users, leading to product market traps where many users prefer these platforms not to exist.

nber.org

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Individuals might experience negative utility from not consuming a popular product. With such externalities to non-users, standard consumer surplus measures, which take aggregate consumption as given, fail to appropriately capture consumer welfare. We propose an approach to account for these externalities and apply it to estimate consumer welfare... See more

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