Follow this authorEduardo Porter's opinions
FollowOne of the standard propositions from bread-and-butter economics is that you wouldn’t pay for something you don’t want. You lose nothing by not having it. But this idea gets weird when it comes to branded goods. Not having that Rolex you can’t afford makes you feel like an outcast at the Met Gala. The same logic applies to the teen craving for Air Jordans. It’s a hall of mirrors: You would rather not splurge. Still, you want them because your friends want them because they think all their friends (including you) want them, too.
Social media amounts to Air Jordans on steroids: Many people join it just because others do. But they rather wouldn’t.
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Imagine that social media appears in a community — say, at a university campus (which is where Facebook first showed up). There is a first wave of enthusiastic adopters, eager to share puppy pictures and lame jokes with their buddies on this new thing. The second wave is more “meh” about the experience. But hey, sometimes the jokes are funny.
Then there’s that last batch of adopters. They would prefer to hang with their friends at the mall or the quad. But they don’t have a choice. Everybody else has signed up to Instagram or TikTok. Not joining amounts to severing themselves from their social circle. So these folks cave and, ultimately, pay for something they would prefer wasn’t there. This is, literally, the price of FOMO.
A quick detour to get over the idea that Instagram and the rest amount to free stuff: You are paying for them, just in attention and data rather than cash. Where the new research gets interesting, though, is where it offers real money to people — university students, in fact — to leave the service.
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They value being on the networks. In an experiment run by the researchers, the students demanded to be paid to leave TikTok or Instagram for a month. But the wrinkle appeared with the next question, about the monetary value of having all of their friends drop the networks, too. It turned out that students would actually pay for that.
The researchers found that students on TikTok would be willing to pay $28 for TikTok to disappear from their social circle for a month. The equivalent for Instagram was $10. Being on the networks, in other words, detracted from their lives. But they would be even worse off if they abandoned the network while their friends stayed on. By the way, non-users in the experiment were willing to pay even more for the networks to disappear from existence.
“Users’ utility is negative but would have been even more negative if they didn’t use the platform, which is why they continue using it,” wrote the economists. Kind........