Must There Be a Facebook?


It’s a real “… and the problem is what exactly?” sort of headline. This from Axios: “Facebook’s new cash-for-data debacle.”

If you’ve been paying any attention at all to data privacy issues — involving Facebook and other technology companies — then you might be aware some activists and academics have suggested users be paid for their personal data. They criticize the current system as “a massive transfer of wealth from ordinary people to the tech titans.”

Now as it turns out, Facebook has been giving a $20 gift card to some users age 13 to 35. And in exchange, explains The Verge’s Casey Newton, “all you have to give up is total access to all data on your phone, and also maybe screenshot your Amazon purchases and fork that over too.”

Now there’s more going on here than just the cash-for-data issue. The Wall Street Journal reports that Apple has now banned the relevant Facebook research app “for breaking its rules around data collection, in an escalating battle between the tech giants over user privacy.”

Beyond that, it’s unclear just how much of a debacle this is. As venture capitalist Alex Rampell tweets: “Nielsen has been doing this since 1942. There’s nothing remotely nefarious or ‘secret’ about this. Nobody being ‘forced’ to do this, and almost every company does market research — with consumer permission, consumer opt-in, and *paying* ONLY consumers who want to opt it…”

And this from Facebook itself: “Despite early reports, there was nothing ‘secret’ about this; it was literally called the Facebook Research App. It wasn’t ‘spying’ as all of the people who signed up to participate went through a clear on-boarding process asking for their permission and were paid to participate. Finally, less than 5 percent of the people who chose to participate in this market research program were teens. All of them with signed parental consent forms.”

Now the counter to this is, hoo boy, the participants were giving up quite a bit. And Facebook has itself to blame for a series of missteps that allows the “new debacle” part of that Axios headline. But what about the cash-for-data bit? What exactly is the value of Facebook? Given all the calls to break up the company, maybe it’s even worth asking, “Should there be a Facebook?”

Lucky for us, there’s a new study addressing this very topic. From “The Welfare Effects of Social Media” by Hunt Allcott, Luca Braghieri, Sarah Eichmeyer, and Matthew Gentzkow (bold by me):

The rise of social media has provoked both optimism about potential societal benefits and concern about harms such as addiction, depression, and political polarization. We present a randomized evaluation of the welfare effects of Facebook, focusing on US users in the run-up to the 2018 midterm election.

We measured the willingness-to-accept of 2,844 Facebook users to deactivate their Facebook accounts for four weeks, then randomly assigned a subset to actually do so in a way that we verified. … Our results leave little doubt that Facebook produces large benefits for its users. A majority of people in our sample value four weeks of access at $100 or more, and these valuations could imply annual consumer surplus gains in the hundreds of billions of dollars in the US alone. The 60 minutes our participants spend on Facebook each day is itself suggestive of the substantial value it provides.

Our results on news consumption and knowledge suggest that Facebook plays an important role as a source of (real) news and information. Our participants’ answers in free response questions and follow-up interviews make clear the diverse ways in which Facebook can improve people’s lives, whether as a source of entertainment, a means to organize a charity or an activist group, or a vital social lifeline for those who are otherwise isolated. Any discussion of social media’s downsides should not obscure the basic fact that it fulfills deep and widespread needs.

Notwithstanding, our results also make clear that the downsides are real. We offer the largest-scale experimental evidence measuring a wide set of potential impacts at both the individual and societal level. We find that four weeks without Facebook improves subjective well-being and substantially reduces post-experiment demand, suggesting that forces such as addiction and projection bias may cause people to use Facebook more than they otherwise would.

We find that while deactivation makes people less informed, it also makes them less polarized by at least some measures, consistent with the concern that social media have played some role in the recent rise of polarization in the US. The estimated magnitudes imply that these negative effects are large enough to be real  concerns, but also smaller in many cases than what one might have expected given prior research and popular discussion. The trajectory of views on social media—with early optimism about great benefits giving way to alarm about possible harms—is a familiar one. Innovations from novels to TV to nuclear energy have had similar trajectories.

Along with the excellent existing work by other researchers, we hope that our analysis can help move the discussion from simplistic caricatures to hard evidence, and to provide a sober assessment of the way a new technology affects both individual people and larger social institutions.

The upside of Facebook seemingly has been forgotten amid all the “debacles.” But there apparently is a real downside, too. You know, like pretty much everything else in life there are benefits and costs. And neither should be ignored.

Published in Economics, Technology
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There are 5 comments.

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  1. Eridemus Coolidge

    I found myself with a real sense of “too much information” for happiness, mostly in the discovery of how many people I formerly respected were part of the “resistance.” More than just voting differently, the continued bombardment from little shared dumb “yard signs” made it an unwanted intrusion overall, like junk phone calls you never gave anyone a reason to think were welcome. You can ignore or filter the “friends” (rather than respond with all the lingering rotten taste that results from having pointless exchanges). But better to just avoid the soul-pollution completely. These, after all, aren’t “discussions” anyway, just mind litter blowing through the yard from some neighbors who can’t keep a lid on their shared trash cans.

    • #1
  2. David Foster Member
    David Foster

    Political “discussions” on Facebook consist mostly of drive-by meme-posting, where the memes rarely include meaningful links or logical arguments.  I think a lot of people are finding the place to be rather unpleasant. Some have defected to Instagram (which of course is owned by the same company)..same thing may happen there.

    Twitter is worse, an excellent vehicle for on-line mobbing.

    The electronic “global village”, as manifested in social media, is demonstrating some of the more unpleasant attributes of the traditional village.  See my post Freedom, the Village, and Social Media.

    • #2
  3. Jon1979 Inactive

    IIRC, part of Facebook’s original appeal for liberals was that had just been purchased by Rupert Murdoch, and they were loathe to use a News Corp. website. The differences other than that seemed trivial, but Facebook was the hot new thing in social media for all the people in the media following social media (and who disliked Fox News), and so here we are.

    As for the info gathering, the Nielsen Corp. sending you cash to keep a diary of hook up a monitoring device to your TV is more of a one-to-one transaction  — they want to know your TV watching habits, but they’re not accessing details of your life away from the set. Facebook’s gotten into trouble already for peeking at people’s cellphone data, among other things where company officials have said one thing when it came to privacy while doing quite another. Cash payments for data would be above board, but people have to know how much data and how long it will be gathered, or it will be like some company suckering a naive landowner into an easement or subsurface land use agreement below market value and on a deal that lasts in perpetuity, because the customer didn’t read the fine print.

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  4. James Lileks Contributor
    James Lileks

    People regard their “data” like skin cells – something immaterial that’s sloughed off no matter what you do. If you get a cool platform that enables some illusion of community and connectivity, that’s something for nothing.

    I don’t think the State will intercede for our good, and limit data collection. I worry they will co-opt the intrusions and find a way to use it for the Greater Good. In which case the arguments over the limitations of the “Right to Privacy” will be rather amusing. 

    • #4
  5. Misthiocracy secretly Member
    Misthiocracy secretly

    I might use Facebook less if more online media outlets still published decent RSS feeds.

    That won’t happen because RSS feeds can’t really be monetized.

    • #5
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