Measuring Markets for Network Goods

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.