Facebook and More Network Economics

After years of protests, I finally joined Facebook last week. Much to my surprise, I’m really digging it. I realize that I’m the last person on the planet to figure out how great Facebook is (except my wife, who is still a holdout), but that’s kind of the point of this post.

As I noted in my last post, network benefits accrue when the value of something goes up as more people use it. Facebook is the poster child for network benefits. The really shocking thing (to me) is that just about everyone I ever met, from brief professional acquaintances to high school friends I haven’t seen or talked to in years are already members. I’m on LinkedIn and Plaxo, but neither of these two come close.

The twist here is the competing economic and privacy interests to get the most out of the site.

I’m sure a bunch of people have written about this, but that’s why I’m blogging about it rather than writing a law review article.

It seems that the primary membership draw is that as more people join, the cheaper it gets to connect with them. I am a heavy (and I mean heavy) user of email. For example, my voicemail comes to my email box, and then I email the caller a response. Email cannot come close to competing with Facebook for easy distribution of information, whether mostly useless status updates to “Hey this is interesting” posts. It also allows for cheap sifting through those posts without having to read through a bunch of email. The upside is huge – I’m keeping up with happenings of people I care about, and letting them know what I’m up to. This is stuff that wouldn’t merit a phone call, but that we all might want to know about anyway. Great stuff.

But there’s a countervailing privacy cost. As it gets cheaper to give and get information, it gets harder to control who gets it. I might not want everyone to see family photos or career thoughts. The default sharing on Facebook is pretty broad (a fact that has received much criticism), and as such it has cost me time and effort to figure out how to narrow who gets information.

For example, because the default “share” status updates and “links” apps don’t have a filter to limit who gets information (through the very nifty friends lists, which are also costly to keep updated), I have posted some updates using the “notes” app, which allows more limited distribution. It works fine, but it’s a few extra steps for me and for the reader, who has to click on the note to read the whole thing.

The upshot is that there is a tradeoff (for me at least) between too little and too much connection. Perhaps a couple tweaks to the Facebook interface (like allowing limited sharing and links) might help, but not completely – the privacy settings are so numerous and complex (a good thing from a privacy point of view) that I’ll always have to check them and update them periodically. I guess you have to take the bad with the good.

Posted by Michael Risch on June 9, 2009 at 07:56 AM

Comments

One of the more interesting studies of Facebook has compared average “inner circle” and “outer cirlce” friends by certain definitions to the theoretical maximum primate brain number of people we can handle in a social community, data that seem to fit the theory fairly well.

Posted by: ohwilleke | Jun 9, 2009 4:31:36 PM

My wife has been using Facebook for about a year and talked me into joining about two weeks ago. I am hooked. It is great to reconnect with old friends from college and high school as well as former students. Like you, I can’t go more than an hour or so without feeling the need to check my email. Will I become addicted to Facebook as well! I need to get back to work on that manuscript but writing is hard work – not as much fun as checking the current photos of college buddies from 1972.

Posted by: Dave Shipley | Jun 9, 2009 11:31:43 AM

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