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E24-477_Goonj_Mohan.pdf (568.98 KB)

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Working paper

Publication date

2024

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cc-by-nc-nd, (c) Mohan, 2024
Please use this identifier to cite or link to this item: https://hdl.handle.net/2445/217265

Regulating a Social Media Platform in the Data Economy

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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.

Subject

Processament de dades, Anàlisi de dades, Xarxes socials

Subject (English)

Image processing, Data analysis, Social networks

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UB Economics – Working Papers [ERE]

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MOHAN, Goonj. Regulating a Social Media Platform in the Data Economy. UB Economics – Working Papers. 2024. Vol.  E24/477. [consulted: 19 of August of 2026]. Available at: https://hdl.handle.net/2445/217265

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