economics Nature Is Weird

A digital social network can be so powerful that a rational person will choose to stay even after they realize the platform is making them miserable.

April 25, 2026

Original Paper

Platform Traps

Andrei Hagiu, Julian Wright

SSRN · 6642504

The Takeaway

Rational agents face a mathematical dilemma where the cost of being excluded from a group exceeds the personal harm of staying. This model explains why millions of people feel trapped by social media and marketplaces that they actively dislike. It is not a matter of weak willpower or addiction but a structural reality of how networks function. The platform effectively forces participation by making non-participation too expensive for the individual. Breaking away requires a collective exit that the system is designed to prevent. This mathematical trap means that personal choice is often an illusion in the digital age.

From the abstract

A novel feature of platforms such as marketplaces and social networks is that non-participants may become worse off as others join. We show that in such settings, rational agents can be induced to join the platform despite being better off without it-a phenomenon we call a platform trap. We provide a dynamic theory of how platform traps emerge through one or more of the following additional features: (i) the ability of the platform to make dynamic price adjustments; (ii) the interplay between on