The Economic Case for Regulating Social Media - The New York Times - 0 views
www.nytimes.com/...media-facebook-regulation.html
social media network economics conspiracy theory hate speech addiction platform ad-financed business model click-bait psychology technology
shared by Javier E on 15 Feb 21
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Social media platforms like Facebook, YouTube and Twitter generate revenue by using detailed behavioral information to direct ads to individual users.
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this bland description of their business model fails to convey even a hint of its profound threat to the nation’s political and social stability.
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legislators in Congress to propose the breakup of some tech firms, along with other traditional antitrust measures. But the main hazard posed by these platforms is not aggressive pricing, abusive service or other ills often associated with monopoly.
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Instead, it is their contribution to the spread of misinformation, hate speech and conspiracy theories.
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digital platforms, since the marginal cost of serving additional consumers is essentially zero. Because the initial costs of producing a platform’s content are substantial, and because any company’s first goal is to remain solvent, it cannot just give stuff away. Even so, when price exceeds marginal cost, competition relentlessly pressures rival publishers to cut prices — eventually all the way to zero. This, in a nutshell, is the publisher’s dilemma in the digital age.
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These firms make money not by charging for access to content but by displaying it with finely targeted ads based on the specific types of things people have already chosen to view. If the conscious intent were to undermine social and political stability, this business model could hardly be a more effective weapon.
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The algorithms that choose individual-specific content are crafted to maximize the time people spend on a platform
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As the developers concede, Facebook’s algorithms are addictive by design and exploit negative emotional triggers. Platform addiction drives earnings, and hate speech, lies and conspiracy theories reliably boost addiction.
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the subscription model isn’t fully efficient: Any positive fee would inevitably exclude at least some who would value access but not enough to pay the fee
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a conservative think tank, says, for example, that government has no business second-guessing people’s judgments about what to post or read on social media.
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That position would be easier to defend in a world where individual choices had no adverse impact on others. But negative spillover effects are in fact quite common
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individual and collective incentives about what to post or read on social media often diverge sharply.
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There is simply no presumption that what spreads on these platforms best serves even the individual’s own narrow interests, much less those of society as a whole.
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a simpler step may hold greater promise: Platforms could be required to abandon that model in favor of one relying on subscriptions, whereby members gain access to content in return for a modest recurring fee.
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Major newspapers have done well under this model, which is also making inroads in book publishing. The subscription model greatly weakens the incentive to offer algorithmically driven addictive content provided by individuals, editorial boards or other sources.
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Careful studies have shown that Facebook’s algorithms have increased political polarization significantly
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More worrisome, those excluded would come disproportionately from low-income groups. Such objections might be addressed specifically — perhaps with a modest tax credit to offset subscription fees — or in a more general way, by making the social safety net more generous.
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Adam Smith, the 18th-century Scottish philosopher widely considered the father of economics, is celebrated for his “invisible hand” theory, which describes conditions under which market incentives promote socially benign outcomes. Many of his most ardent admirers may view steps to constrain the behavior of social media platforms as regulatory overreach.
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But Smith’s remarkable insight was actually more nuanced: Market forces often promote society’s welfare, but not always. Indeed, as he saw clearly, individual interests are often squarely at odds with collective aspirations, and in many such instances it is in society’s interest to intervene. The current information crisis is a case in point.