Abstract

A major policy concern that has emerged in recent years is whether social media platforms, driven completely by their profit motivations, create divisions within a society and inject bias into its user base. A related question is: how should a policymaker intervene if these allegations were to be true? In this study, we set up a microeconomic model to study whether a platform’s profit motivation may indeed compel it to adopt a user-targeting strategy that injects bias and creates polarization. We then examine how a policymaker might intervene and whether there are unintended consequences of such an intervention. In doing so, we discover an interesting duality between polarization and bias—both can add to the platform’s coffers, but they might act as substitutes in its profit function. If the policymaker tries to crack down on polarization, it could end up making the platform switch to bias instead. Finally, we examine the role of public awareness in moderating the platform’s desire for profit. Our results provide broad insights into a platform’s incentives and add to the public debate on this issue.

DOI

10.17705/1jais.00925

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