Nash Equilibria in Switching Social Media Sites
Despite recent controversies surrounding personal data usage and fake news, Facebook has managed to retain its status as the foremost social media site in America. This article claims that this phenomenon can be attributed in part to the sunk cost fallacy and to a Nash equilibrium relating to when people are willing to switch social media sites given the choices of others. The sunk cost fallacy refers to the emotional investment that people have already put into their Facebook accounts. Facebook’s “On this Day” feature, which brings photos and posts from this date years ago into a user’s feed is a regular reminder of how much time its users have spent on the platform and how much work would need to go into making an account with the same level of personal meaning on another site.
Switching to a different social media site can be modeled as a game. The players are the users of Facebook, who can either choose to stay on Facebook given its controversies or switch to a different site. The payoffs are the experiences that the users will have on the site they choose. A user’s experience on a site is directly proportional to the number of users on the site, e.g. a user will have a better experience on a site if there are more of their friends on that site. Thus, a Facebook user will switch to a different site if most other Facebook users are also switching. It follows that two Nash equilibria exist. Either all users choose to switch to another site or all users choose to stay on Facebook, both of which result in high payoffs for all users. Currently, the latter exists. It is worth noting the limitations of this model. Not all users would switch entirely to a different site; some could have accounts on both sites. Also, not all Facebook users would rely on the decisions of other users in choosing to stay or switch. Regardless, this model helps to explain why people are more likely to make the same decisions as their friends when it comes to social media site usage.
The Nash Equilibrium and Sunk Cost Fallacy Protect Facebook From Itself