Regulating a Social Media Platform in the Data Economy

Goonj Mohan ()
Additional contact information
Goonj Mohan: Universitat de Barcelona

No 2024/477, UB School of Economics Working Papers from University of Barcelona School of Economics

Abstract: This paper studies regulation of a social media platform (SMP). I consider a user network with data externalities and an SMP that earns revenue from data-based personalized advertising. The SMP offers a price for user data and users simultaneously accept or reject the offer. Under a microfounded model I show that sharing moderate amount of user data maximizes user welfare. However, externalities reduce price for data and all data is shared in equilibrium. A strict consent policy like GDPR overcorrects this imbalance, burdens users with complete data-control and decreases user welfare. Data minimization moderately shifts data-control to users and increases user welfare.

Keywords: Bayesian signalling; data; social media platform; user welfare (search for similar items in EconPapers)
JEL-codes: C11 D62 D83 H23 L51 L88 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://hdl.handle.net/2445/217265 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 read timeout (https://hdl.handle.net/2445/217265 [302 Found]--> https://diposit.ub.edu/dspace/handle/2445/217265)

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:ewp:wpaper:477web

Access Statistics for this paper

More papers in UB School of Economics Working Papers from University of Barcelona School of Economics Av. Diagonal 690, 08034 Barcelona. Contact information at EDIRC.
Bibliographic data for series maintained by University of Barcelona School of Economics ().