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Economists Calculate the True Value of Facebook To Its Users in New Study (arstechnica.com)
A series of auctions revealed that Facebook users value the company's service so highly that it would take on average more than $1,000 to convince them to deactivate their accounts for a year, according to a recent paper published in PLOS One. From a report: This doesn't mean much for the company's stock market valuation, but it's a good indicator that people find value in Facebook regardless of the many concerns raised recently. The paper started out as two separate studies. Jay Corrigan, an economist at Kenyon College, and his collaborator, Matt Rousu of Susquehanna University, were interested in a session on this topic at an upcoming conference. They discovered that Sean Cash (Tufts University) and Saleem Alhabash (Michigan State University) were doing something very similar.
Since the design of both studies was so complementary, they decided to combine their data and results into a single paper. Cash and Saleem had a larger sample for their part of the study and looked at a longer time period of one year, while Corrigan and Rosein focused on shorter time frames, asking subjects to quit Facebook for one day, three days, or seven days. The studies nonetheless had similar results.
Since the design of both studies was so complementary, they decided to combine their data and results into a single paper. Cash and Saleem had a larger sample for their part of the study and looked at a longer time period of one year, while Corrigan and Rosein focused on shorter time frames, asking subjects to quit Facebook for one day, three days, or seven days. The studies nonetheless had similar results.
The problem with Facebook isn't its value proposition. Clearly people (though perhaps not many of us) find value in using it. The problem with Facebook is the lack of informed consent.
I have no problem with people pissing away their privacy for some additional, marginal utility. That's their prerogative. But that person has a right to understand what it means when they do so: to understand what they're giving up in exchange for what they're receiving. That's a foundational principle on which transactions are built in functioning societies.
When I pay for goods in a store, the terms of the transaction make it clear what each party is giving up: I pay $X and in exchange I receive Y item. One or both of us may not properly value what it is that we're giving up (e.g. an eBay seller listing an item far under what it's worth), but there's never a question about what's being exchanged. But when comparable transactions occur between Facebook and its users, most users aren't even aware that those transactions have occurred, let alone what they've lost in the process. That's the problem.
If people want to throw away their privacy, that's their call, but force those capitalizing on it to make it clear what that means.
That is actually a humorous response. Kudos.
"If you want to improve, be content to be thought foolish and stupid." - Epictetus
This poll is not representative of the vast majority of FB users. It used US college students as subjects
- anecdotally FB is a tool of old folks
- college students don't have a care. Unless they're worried about staying in touch with mom
The theme of the report is interesting however flawed the sample.
Facebook is analyzing all of your online interactions and images to target market goods to you.
So... instead of getting ads for random shit, people will see ads that might interest them?
Oh no! This is surely the fall of western civilization!
Seriously. Go find something worth getting outraged about. 2 billions people think Facebook is worth using. You are an anomaly.
Captcha: "paranoia"!
Hi. Economist here. I didn't read TFA but any decent behavioral economist should be accounting for our human bias towards loss aversion (psychologically speaking losses weigh up to 5x as heavily on us as a proportional gain). Therefore, the $1000 "value" should be divided by 5, giving us an UPPER bound of $200 of value. Agree with other posters here: a better alternative is to ask how much would someone pay? The answer is apparently not a lot, which is why have to use ads and steal our data. If I had to guess, $15/less, probably closer to =$5.