New research shows social media platforms do not need to addict users to keep them – they just need to make leaving worse than staying
Social media platforms such as Instagram and TikTok harm their users yet continue to grow because people feel compelled to stay, not because they are addicted, but because being off the network is even worse than being on it, according to UNSW Business School research.
The study, published in the Journal of Public Economics, found that social media platforms create "bad networks" – platforms where participation is harmful but opting out carries an even higher social cost. The UNSW Business School researchers showed that these networks are not hard to establish. In fact, a small number of early adopters is all it takes to trigger a cascade that drags in everyone else.
The study, Bad Networks, was co-authored by UNSW Business School’s Professor Robert Akerlof, Scientia Professor Richard Holden and Dr DJ Thornton, a Postdoctoral Fellow at the Manos Institute for Cognitive Economics at UNSW Sydney. Using game-theoretic modelling, the researchers solved for the ‘Nash equilibrium’ – the point at which no individual has an incentive to change their decision, given what everyone else is doing, to show how networks that harm users form, grow and persist.
“The upsides of network effects have been widely studied and are well understood”, said Prof. Holden. “We wanted to better understand the dark side of networks.”
The researchers found that social media platforms are prone to becoming bad networks because they generate social media ‘rat races’ – competitions for likes, followers and public signals of status that deliver no collective benefit and may reduce wellbeing. The study showed that platforms have an incentive to intensify these competitive dynamics because doing so tends to increase network size, even at the expense of users.
"Amplifying the rat race boosts network size, which, while harmful to consumers, may benefit the platform," the paper stated.
Prof. Holden said that “when people are judged by their number of followers or likes, there is extreme pressure to post and to participate in the network to keep up with their peers. This is the very essence of a ‘rat race’.”
The Facebook Files and mounting legal action
Internal Meta research cited in the paper illustrates the problem. The company’s own analyses, as reported in the Wall Street Journal's coverage of the "Facebook Files", acknowledged that Instagram worsened body image issues for one in three teenage girls and that users themselves blamed the platform for increases in anxiety and depression. Despite this, participation persisted.
The question of what platforms knew about the harm they caused (and when) has since moved into the courts. A New Mexico jury recently ordered Meta to pay US$375 million after finding the company violated state consumer protection law by misleading users about the safety of its platforms and failing to protect children from exploitation.
Shortly after, a Los Angeles jury found Meta and Google liable in a separate case, ruling that Instagram and YouTube were designed to addict young users, awarding US$6 million in damages to a woman who said she became hooked on the platforms as a child. Both companies said they disagreed with the verdicts and would appeal.
How instigators influence resistors
The study's model identified two user types. "Instigators" join early because they gain from visibility and status, "creating a snowball effect" that pressures others to follow. "Resistors" who dislike the platform eventually sign up because the social cost of staying away becomes too high. The researchers compared the dynamic to "parties that people do not wish to attend but feel obligated to go to when others are going."
“High-profile influencers on social media (people with lots of Instagram followers, for instance) are potential instigators. But so are influential people in more localised networks, such as on university campuses,” Prof. Holden explained.
As part of the research, a survey of university students cited in the paper captured the dynamic. On average, students would need to be paid US$59 to get off TikTok for four weeks. Yet those same students said they would pay US$28 to have TikTok switched off for everyone – evidence that users are trapped on platforms they would collectively prefer to leave.
Between 2019 and 2021, Instagram ran an experiment hiding public "like" counts, with the stated aim "to make it less of a competition", according to other research cited in the paper. It found that removing visible likes reduced negative affect and loneliness among users – yet Instagram made the change optional rather than the default.
Can regulation fix harmful social media networks?
The paper also examined whether regulation could address the problem. The researchers found that Pigouvian taxes (charges designed to make users pay for the harm they impose on others) can work in some situations. But once a bad network is established, a tax calibrated to the harm each user causes may not dislodge it, because each individual user has almost no effect on the network's overall size.
As the paper noted: "Achieving the socially preferred outcome may require a more extreme policy – a tax high enough to destroy the bad equilibrium altogether, or an outright ban on the network – rather than merely correcting the marginal externality at the existing network size."
Australia's legislation banning social media for users under 16 was cited as an example of a targeted policy that removes the instigators needed to tip a peer network into harmful territory.
“Australia has been a world leader in age verification for social networks – though how effective that policy is, remains to be seen,’ Prof. Holden said. “The broader challenge is limiting bad networks through taxes on usage or directly on algorithms that cause harm to users.”
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