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Feed for good? On the effects of personalization algorithms in social media platforms

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  • Miguel Risco
  • Manuel Lleonart-Anguix

Abstract

This paper builds a theoretical model of communication and learning on a social media platform, and describes the algorithm an engagement-maximizing platform implements in equilibrium. This algorithm overexploits similarities between users, locking them in echo chambers. Moreover, learning vanishes as platform size grows large. As this is far from ideal, we explore alternatives. The reverse-chronological algorithm that social platforms reincorporated after the DSA was enacted turns out to be insufficient, so we construct the "breaking-echo-chambers" algorithm, which improves learning by promoting opposite viewpoints. Finally, we advocate for horizontal interoperability as a regulatory measure to align platform incentives with social welfare. By eliminating platform-specific network effects, interoperability incentivizes platforms to adopt algorithms that maximize user well-being.

Suggested Citation

  • Miguel Risco & Manuel Lleonart-Anguix, 2024. "Feed for good? On the effects of personalization algorithms in social media platforms," CRC TR 224 Discussion Paper Series crctr224_2024_580v2, University of Bonn and University of Mannheim, Germany, revised Dec 2024.
    • Handle: RePEc:bon:boncrc:crctr224_2024_580v2
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    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp580
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    References listed on IDEAS

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    1. Paul Belleflamme & Martin Peitz, 2019. "The Competitive Impacts of Exclusivity and Price Transparency in Markets With Digital Platforms," CRC TR 224 Discussion Paper Series crctr224_2019_137, University of Bonn and University of Mannheim, Germany.
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    More about this item

    Keywords

    personalized feed; social learning; network effects; interoperability;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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