Measuring Markets for Network Goods

Leonardo Bursztyn, Matthew Gentzkow, Rafael Jimenez-Duran, Aaron Leonard, Filip Milojevic, Christopher Roth and Matthew Gentzkow

No 12049, CESifo Working Paper Series from CESifo

Abstract: Market definition is essential for antitrust analysis, but challenging in settings with network effects, where substitution patterns depend on changes in network size. To address this challenge, we conduct an incentivized experiment to measure substitution patterns for TikTok, a popular social media platform. Our experiment, conducted during a time of high uncertainty about a potential U.S. TikTok ban, compares changes in the valuation of other social apps under individual and collective TikTok deactivations. Consistent with a simple framework, the valuations of alternative social apps increase more in response to a collective TikTok ban than to an individual TikTok deactivation. Our framework and estimates highlight that individual and collective treatments can even lead to qualitatively different conclusions about which alternative goods are substitutes.

Keywords: markets; network goods; coordination; collective interventions (search for similar items in EconPapers)
JEL-codes: D83 D91 J15 P16 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-com, nep-exp and nep-soc
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