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Measuring Markets for Network Goods

Author

Listed:
  • Leonardo Bursztyn

    (University of Chicago & NBER)

  • Matthew Gentzkow

    (Stanford University & NBER)

  • Rafael Jiménez-Durán

    (Bocconi University, IGIER, CESifo, & Chicago Booth Stigler Center)

  • Aaron Leonard
  • Filip Milojević

    (University of Chicago)

  • Christopher Roth

    (University of Cologne, NHH Norwegian School of Economics, Max Planck Institute for Research on Collective Goods, CESifo, & CEPR)

Abstract

Market definition is essential for antitrust analysis, but challenging in settings with network effects, where substitution patterns depend on changes in network size. To address this challenge, we conduct an incentivized experiment to measure substitution patterns for TikTok, a popular social media platform. Our experiment, conducted during a time of high uncertainty about a potential U.S. TikTok ban, compares changes in the valuation of other social apps under individual and collective TikTok deactivations. Consistent with a simple framework, the valuations of alternative social apps increase more in response to a collective TikTok ban than to an individual TikTok deactivation. Our framework and estimates highlight that individual and collective treatments can even lead to qualitatively different conclusions about which alternative goods are substitutes.

Suggested Citation

  • Leonardo Bursztyn & Matthew Gentzkow & Rafael Jiménez-Durán & Aaron Leonard & Filip Milojević & Christopher Roth, 2025. "Measuring Markets for Network Goods," ECONtribute Discussion Papers Series 363, University of Bonn and University of Cologne, Germany.
    • Handle: RePEc:ajk:ajkdps:363
    as

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    File URL: https://www.econtribute.de/RePEc/ajk/ajkdps/ECONtribute_363_2025.pdf
    File Function: Second version, 2025
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    References listed on IDEAS

    as
    1. Leonardo Bursztyn & Benjamin R. Handel & Rafael Jimenez & Christopher Roth, 2023. "When Product Markets Become Collective Traps: The Case of Social Media," NBER Working Papers 31771, National Bureau of Economic Research, Inc.
    2. Craig E. Landry & John A. List, 2007. "Using Ex Ante Approaches to Obtain Credible Signals for Value in Contingent Markets: Evidence from the Field," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(2), pages 420-429.
    3. Leonardo Bursztyn, 2023. "When Product Markets Become Collective Traps: The Case of Social Media," ECONtribute Discussion Papers Series 260, University of Bonn and University of Cologne, Germany.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

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    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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