Social Media as a Disruptor for Network Effects occurring in politics.
There is a significant barrier to entry into politics. We’ll focus on the Presidential election, as it is the most widely known and voted-for election that takes place in the USA. What is the cause of this barrier? Theoretically, anyone, as long as they meet the criteria to run, should have a shot at winning the presidential election. Then why, cycle after cycle, do the same two parties hold all the power?
A politician must have supporters, or else he will fail to win the election, irrespective of his skill at being a politician. In fact, the majority of the skill in being a politician is overcoming the barrier to entry to be elected, and then maintaining your position regardless of your morals or prior demands.
We can attribute some of the barriers to Network effects. The effects take place when we have multiple decision-makers, who all contribute to the result/success of a product, in this case, the election. The relative benefit that any voter receives is greatly increased by having more fellow voters also voting for the same candidate, as the likelihood of them being elected and implementing policies that the voter prefers becomes higher. This becomes an information cascade where once a voter sees that a primary candidate they like is not going to win, they change their allegiance to the candidate who’s most likely to win and whose priorities still align best with their own.
How to give signals, then, to convince any individual that a certain candidate has much more potential than another comes down to marketing. Campaigns spend upwards of $1bn dollars buying the airtime to be able to convince certain demographics that their candidate is the true winner. This too can be seen as a matching market with advertisers and political campaigns. But, where the disruption comes into play is when we see some politicians start to utilize social media much more than others. Not a historically large market for politicians, but having a huge viewership, larger even than Cable TV now, this medium was ripe to disrupt the market that the majority play into to buy their ads. Donald Trump, for example, used this to his advantage when becoming a significant Twitter presence, all of which ranting and campaigning he did on the app required a monetary sum insignificant compared to classical ads. By allowing voters to see these contrasting signals, they can break out of the information cascade that they might have fallen into, and use their own information to make a decision about who to vote for. This might have been a one-time anomaly though that occurred with the emergence of social media. As the platform becomes more saturated and companies catch up to the advertisers who had a brief advantage, they will once again be able to enable the battle for a matching market between the advertisers that will pay the most.
https://knowledge.wharton.upenn.edu/article/how-social-media-is-shaping-political-campaigns/