The Social Media Externality

Sarit Markovich and Luis Rayo

No 21432, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We develop a framework for understanding how social media can reduce both motivation and well-being. In the model, curated social-media feeds raise the bar for feeling successful and distort how people learn about their capability from their own outcomes. Individuals then work toward an unrealistic standard and misread poor results as evidence of low capability rather than as a consequence of biased comparisons. The result is a motivation trap in which pessimistic beliefs and low effort reinforce one another over time. The same mechanism also reduces well-being by making rewarding moments less frequent. Finally, the model explains why social media can amplify preexisting motivational inequality and why competence-building interventions are especially promising.

JEL-codes: D62 D83 D86 I31 L82 (search for similar items in EconPapers)
Date: 2026-04
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP21432 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:21432

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP21432

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().