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Pretty interesting. I bet if you took that same group and said Facebook now costs 1000 a year to use they would all quit. It’s easier to spend money that wasn’

Pretty interesting. I bet if you took that same group and said Facebook now costs 1000 a year to use they would all quit. It’s easier to spend money that wasn’t in your wallet in the first place. It’s when you start taking it out of the wallet that people react.

olivierduval 8y ago
Exactly... enough is to see how people react to the simple idea of "paying" for FB, even 1$ I guess the study is funded by FB toward the investors... :-D
- tefferon 8y ago
  now that would be an interesting study
gph1234 8y ago
You just described Loss Aversion perfectly: https://en.wikipedia.org/wiki/Loss_aversion https://en.wikipedia.org/wiki/Loss_aversion
- hinkley 8y ago
  Thinking the same thing, but then I realized that if the topic is "how do you get people off of Facebook" then loss aversion is exactly what you're fighting against. They lost their privacy without thinking about it, but giving up Facebook would require a conscious act. So now they're thinking about loss, and that causes feelings.
stcredzero 8y ago
It’s easier to spend money that wasn’t in your wallet in the first place. It’s when you start taking it out of the wallet that people react. Seems to me that there's an application of this idea to early stage startups.
Wowfunhappy 8y ago
I'm not sure why they didn't just ask this question directly? Both scenarios are hypothetical, as no one is being actually paid to quit Facebook. So, why not make the hypothetical scenario: "Using Facebook now costs $X per month; how high does X need to be before you quit?"
- ianferrel 8y ago
  The experiment reported in the paper isn't hypothetical. They actually paid people to deactivate their Facebook accounts.
  - arbol 8y ago
    Did they only pay people who make money from Facebook? This wasn't clear to me... 1000 USD seems like a hell of a lot of money for an average user to require.
Tomminn 8y ago
I suspect it'd depend entirely on whether facebook costs everybody $1000/year, or just them. If facebook costed everybody $1000/year, I would definitely stop using it, because the network would be immediately broken since everybody would know everybody with any sense would stop using it. If facebook only costed only me $1000/year, I would know the network was still intact, and I would consider it.
- inetknght 8y ago
  Frankly, I do not understand your logic. If it costs everyone $1000, there will be many many many people who cannot afford that. If it costs only me $1000, I'd stop using it because... well I already stopped using it so I did it for free actually.
  - SkyPuncher 8y ago
    First case, that's the point. Nobody would use it so everybody would move onto something else. Second case, being the only one out (i.e. the black sheep) means you might consider paying for it to not stand out.
  - daveFNbuck 8y ago
    The logic is that Facebook is currently worth $1000 but would be worth much less because of the many people who would stop using it if it had that cost.
    - inetknght 8y ago
      Oh, now that makes sense. Thanks.
    - mcbits 8y ago
      Similar logic also works the other way. If someone really offered all Facebook users $1000 to quit for a year, almost everyone would quit because even those who currently value it above $1000 know that it won't be worth that much after most of their network quits. The actual cost to get, say, 50% of users to quit is probably much less than $1000 apiece.
VLM 8y ago
The first problem is I thought it was "widely accepted" that FB use was a typical power law distribution where a small fraction of users, use it the most. Kinda like drinking alcohol or income inequality stats or heroin use stats. Something that works and means something for well distributed random collections like an average SD or median is meaningless when talking about numerically integrating a power law function to determine a total value. The second problem is I read the entire paper and as per problem #1 above, because its an extreme power law distribution, in "Auction 2 results" the average bid to give up FB was an insane $2076 but the SD is over eight thousand dollars and the 50% median was a mere $200. The third problem is, I admit I don't use FB, but my understanding from my wife is if you disable your account for a day, you're really measuring the cost of time-shifting a days worth of content forward a day. They were not really measuring giving up FB for a day in the shorter samples (see discussion of Auction 1 results) they were measuring the cost of chronologically messing up the UI for one day, or something like that in concept. Its like arguing if I bought the new edition of "Refactoring" using amazon prime the 2 day delivery was worth $40 or whatever the book cost whereas in reality I don't really care about the shipping cost on 2-day vs media mail shipping, kinda. The forth killer problem is the market is too weak and thin. Lots of brain power goes into evaluating the correct price for one share of GE or CAT or IBM. As such the price has a certain meaning and validation and use in the real world. No brain power goes into calculating the price of viewing a sunset or temporarily deactivating a FB account and as such a measurement merely measures random numbers and can't be used in the real world for any purpose, comparative or otherwise. In theory a widely popular and intensely studied marketplace of the cost of viewing a sunset or deactivating a FB account COULD exist, but since it doesn't, its just kinda a measure of random numbers mixed with how much money I feel I should get for a days minor annoyance, like a wifi or mobile phone outage. Some numbers from Auction 1 Results are creepily similar to "how much of a credit should I get for an internet outage", or "What is a fair per-diem reimbursement for a cheap company", not a specifically FB related cost.
- hinkley 8y ago
  That line bugs me too. We're mixing figures of speech with statistics and that always always goes sideways (sometimes it looks like chicanery). What does it mean to get the 'average person' to quit? Half of people are still on FB? Almost nobody is still on FB? Average height makes sense, because it's a continuum. How do you average discontinuous values? What's the average gender of Americans? If I'm reading the same data they are, the median price is $730. Which means if you offered everybody $730 half of them would quit. A few of those people would be really happy because all they wanted was $100. If you were a deranged billionaire and you decided to burn Facebook, you might be able to get half of them to quit at an average of $400 apiece. But even that doesn't make sense because people are people. If my neighbor already got a check for $900 what are you doing giving me this check for $450? I want $900, same as him. Practically, you'd just have to cut checks for $730 and offer everyone the same amount, which means $1000 isn't a real number either. Because I'm sure as hell not gonna take $450 if my buddy knows the guy who got $5000. So it's $1000 checks and you get 65% of people to quit.
jancsika 8y ago
> I bet if you took that same group and said Facebook now costs 1000 a year to use they would all quit. 10 cigarettes a day * 30 days / 20 cigarettes in a pack = 15 15 packs a month * $6 per pack = $90 per month $1000 a year / 12 months in a year= $83 Keeping in mind that each individual cigarette doesn't even have any event listeners hooked up to it to gather usage data... Yeah, I'd take that bet.
- cstrat 8y ago
  If you're in Australia those packs will cost $40 each in 2020.
- alanlamm 8y ago
  Hmm cigarettes with analytics...
  - tonyedgecombe 8y ago
    You could give them away for free and make it up by selling adverts for chemo.
- Izkata 8y ago
  As the video game world learned, you're not comparing the same thing. Microtransactions that add up to $1000 is very different than a lump sum once per year.
TheRealPomax 8y ago
I don't quite understand how that suggestion translates to a useful metric in terms of what is a reasonable estimate of the "real" market value of Facebook inc. is, though? (insofar as we can of course talk about "real" values). This was not an investigation into "how much do you need to pay people to quit" (if it was, their methodology would have been _highly_ flawed).
deleted 8y ago
[deleted]

olivierduval 8y ago

Exactly... enough is to see how people react to the simple idea of "paying" for FB, even 1$ I guess the study is funded by FB toward the investors... :-D

tefferon 8y ago
now that would be an interesting study

gph1234 8y ago

You just described Loss Aversion perfectly: https://en.wikipedia.org/wiki/Loss_aversion https://en.wikipedia.org/wiki/Loss_aversion

hinkley 8y ago
Thinking the same thing, but then I realized that if the topic is "how do you get people off of Facebook" then loss aversion is exactly what you're fighting against. They lost their privacy without thinking about it, but giving up Facebook would require a conscious act. So now they're thinking about loss, and that causes feelings.

stcredzero 8y ago

It’s easier to spend money that wasn’t in your wallet in the first place. It’s when you start taking it out of the wallet that people react. Seems to me that there's an application of this idea to early stage startups.

Wowfunhappy 8y ago

I'm not sure why they didn't just ask this question directly? Both scenarios are hypothetical, as no one is being actually paid to quit Facebook. So, why not make the hypothetical scenario: "Using Facebook now costs $X per month; how high does X need to be before you quit?"

ianferrel 8y ago
The experiment reported in the paper isn't hypothetical. They actually paid people to deactivate their Facebook accounts.
- arbol 8y ago
  Did they only pay people who make money from Facebook? This wasn't clear to me... 1000 USD seems like a hell of a lot of money for an average user to require.

Tomminn 8y ago

I suspect it'd depend entirely on whether facebook costs everybody $1000/year, or just them. If facebook costed everybody $1000/year, I would definitely stop using it, because the network would be immediately broken since everybody would know everybody with any sense would stop using it. If facebook only costed only me $1000/year, I would know the network was still intact, and I would consider it.

inetknght 8y ago
Frankly, I do not understand your logic. If it costs everyone $1000, there will be many many many people who cannot afford that. If it costs only me $1000, I'd stop using it because... well I already stopped using it so I did it for free actually.
- SkyPuncher 8y ago
  First case, that's the point. Nobody would use it so everybody would move onto something else. Second case, being the only one out (i.e. the black sheep) means you might consider paying for it to not stand out.
- daveFNbuck 8y ago
  The logic is that Facebook is currently worth $1000 but would be worth much less because of the many people who would stop using it if it had that cost.
  - inetknght 8y ago
    Oh, now that makes sense. Thanks.
  - mcbits 8y ago
    Similar logic also works the other way. If someone really offered all Facebook users $1000 to quit for a year, almost everyone would quit because even those who currently value it above $1000 know that it won't be worth that much after most of their network quits. The actual cost to get, say, 50% of users to quit is probably much less than $1000 apiece.

VLM 8y ago

The first problem is I thought it was "widely accepted" that FB use was a typical power law distribution where a small fraction of users, use it the most. Kinda like drinking alcohol or income inequality stats or heroin use stats. Something that works and means something for well distributed random collections like an average SD or median is meaningless when talking about numerically integrating a power law function to determine a total value. The second problem is I read the entire paper and as per problem #1 above, because its an extreme power law distribution, in "Auction 2 results" the average bid to give up FB was an insane $2076 but the SD is over eight thousand dollars and the 50% median was a mere $200. The third problem is, I admit I don't use FB, but my understanding from my wife is if you disable your account for a day, you're really measuring the cost of time-shifting a days worth of content forward a day. They were not really measuring giving up FB for a day in the shorter samples (see discussion of Auction 1 results) they were measuring the cost of chronologically messing up the UI for one day, or something like that in concept. Its like arguing if I bought the new edition of "Refactoring" using amazon prime the 2 day delivery was worth $40 or whatever the book cost whereas in reality I don't really care about the shipping cost on 2-day vs media mail shipping, kinda. The forth killer problem is the market is too weak and thin. Lots of brain power goes into evaluating the correct price for one share of GE or CAT or IBM. As such the price has a certain meaning and validation and use in the real world. No brain power goes into calculating the price of viewing a sunset or temporarily deactivating a FB account and as such a measurement merely measures random numbers and can't be used in the real world for any purpose, comparative or otherwise. In theory a widely popular and intensely studied marketplace of the cost of viewing a sunset or deactivating a FB account COULD exist, but since it doesn't, its just kinda a measure of random numbers mixed with how much money I feel I should get for a days minor annoyance, like a wifi or mobile phone outage. Some numbers from Auction 1 Results are creepily similar to "how much of a credit should I get for an internet outage", or "What is a fair per-diem reimbursement for a cheap company", not a specifically FB related cost.

hinkley 8y ago
That line bugs me too. We're mixing figures of speech with statistics and that always always goes sideways (sometimes it looks like chicanery). What does it mean to get the 'average person' to quit? Half of people are still on FB? Almost nobody is still on FB? Average height makes sense, because it's a continuum. How do you average discontinuous values? What's the average gender of Americans? If I'm reading the same data they are, the median price is $730. Which means if you offered everybody $730 half of them would quit. A few of those people would be really happy because all they wanted was $100. If you were a deranged billionaire and you decided to burn Facebook, you might be able to get half of them to quit at an average of $400 apiece. But even that doesn't make sense because people are people. If my neighbor already got a check for $900 what are you doing giving me this check for $450? I want $900, same as him. Practically, you'd just have to cut checks for $730 and offer everyone the same amount, which means $1000 isn't a real number either. Because I'm sure as hell not gonna take $450 if my buddy knows the guy who got $5000. So it's $1000 checks and you get 65% of people to quit.

jancsika 8y ago

> I bet if you took that same group and said Facebook now costs 1000 a year to use they would all quit. 10 cigarettes a day * 30 days / 20 cigarettes in a pack = 15 15 packs a month * $6 per pack = $90 per month $1000 a year / 12 months in a year= $83 Keeping in mind that each individual cigarette doesn't even have any event listeners hooked up to it to gather usage data... Yeah, I'd take that bet.

cstrat 8y ago
If you're in Australia those packs will cost $40 each in 2020.
alanlamm 8y ago
Hmm cigarettes with analytics...
- tonyedgecombe 8y ago
  You could give them away for free and make it up by selling adverts for chemo.
Izkata 8y ago
As the video game world learned, you're not comparing the same thing. Microtransactions that add up to $1000 is very different than a lump sum once per year.

TheRealPomax 8y ago

I don't quite understand how that suggestion translates to a useful metric in terms of what is a reasonable estimate of the "real" market value of Facebook inc. is, though? (insofar as we can of course talk about "real" values). This was not an investigation into "how much do you need to pay people to quit" (if it was, their methodology would have been _highly_ flawed).

deleted 8y ago

[deleted]