Measuring Markets for Network Goods

Leonardo Bursztyn (), Matthew Gentzkow (), Rafael Jiménez-Durán (), Aaron Leonard (), Filip Milojević () and Christopher Roth
Additional contact information
Leonardo Bursztyn: University of Chicago & NBER
Matthew Gentzkow: Stanford University & NBER
Rafael Jiménez-Durán: Bocconi University, IGIER, CESifo, & Chicago Booth Stigler Center
Filip Milojević: University of Chicago

No 363, ECONtribute Discussion Papers Series from University of Bonn and University of Cologne, Germany

Abstract: Market definition is challenging in settings with network effects, where substitution patterns depend on changes in network size. We study these effects in the context of social media. We conduct an incentivized experiment comparing substitution in response to a proposed U.S. TikTok ban, in which all users simultaneously leave the app, with substitution when only a single user deactivates. We find substantially higher valuations of alternative social apps under a collective TikTok ban than under an individual TikTok deactivation. Mechanism evidence shows that both anticipated content-supply shifts and social coordination partly explain the wedge, with the relative importance of each channel varying across platforms. We then show that a collective time limit challenge, where peers jointly reduce TikTok and Instagram use, leads to more time spent on alternative social apps than has been observed in prior individual deactivation experiments. Together, our results suggest that individual-level substitution estimates can be an unreliable guide to market definition for network goods.

Keywords: Market Definition; Network Goods; Coordination; Substitution; Social Media (search for similar items in EconPapers)
JEL-codes: D85 L00 L40 (search for similar items in EconPapers)
Pages: 59 pages
Date: 2025-05
New Economics Papers: this item is included in nep-exp, nep-ind, nep-pay, nep-reg and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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https://www.econtribute.de/RePEc/ajk/ajkdps/ECONtribute_363_2025.pdf Third version, 2026 (application/pdf)

Related works:
Working Paper: Measuring Markets for Network Goods (2025)
Working Paper: Measuring Markets for Network Goods (2025)
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Persistent link: https://EconPapers.repec.org/RePEc:ajk:ajkdps:363

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