ICES Seminar in Experimental Economics and Game Theory
A Model of Profits vs. Polarization on Platforms
Friday, February 14, 2025 12:00 PM to 1:00 PM EST
Vernon Smith Hall (formerly Metropolitan Building), 5183
The ICES Seminar in Experimental Economics and Game Theory of the Fall 2024 semester will feature:
Costello College of Business, George Mason University
A Model of Profits vs. Polarization on Platforms
Abstract
Can welfare and profit motives coexist? We explore this fundamental question in light of two-sided platforms and growing affective polarization. Multi-sided platforms – from social media platforms to political parties – typically need more efficient and equitable participation (Lioy et al., 2019; Nyhuis and Stoetzer, 2021). Still, social trends like affective polarization and ‘us vs. them’ attitudes aggravate participation inequality and inefficiency. Empirical research has reflected the view that fears of a broader “sectarianism” generated by affective and sociological polarization have essentially replaced concerns over affective polarization (Finkel et al., 2020). Still, hardened social identities and their distinct sorting into the two main parties in the US have led to ‘othering’, hate, suspicion of the opposition, and moral superiority for one’s side (Schedler, 2023).
Even though the relationship between digital platforms and divided opinions is tenuous, recent research suggests that social media can foster polarization (Schedler, 2023). Polarization varies greatly across platforms, and the strength of conclusions depends on how they are assessed (Kreiss and McGregor, 2024). Nevertheless, calls for social media platforms in particular, and platforms (e.g., political parties) in general, to tackle rising affective polarization have increased in recent years (Overgaard and Woolley, 2022). For instance, platforms can promote more positive interparty contact, prioritize popular content among disparate user groups, design better user interfaces, and correct misconceptions to reduce friction between participating users. Still, few of these initiatives reach most persons prone to depolarized conduct. For instance, Facebook has tested Newsfeed filters to show opposing political posts. These filters are great, but only people who do not think polarization is an issue utilize them (Lydia, 2020). Consequently, platforms must trade-off between maximizing profits from more polarized users engaging with others and less polarized users’ passive participation. A clear answer on what to prioritize, profits or welfare, is unclear
For more information about the Seminar Series, please visit the Seminar Schedule homepage.
