Digital Media Mergers: Theory and Application to Facebook-Instagram

We thank Guy Aridor, Susan Athey, Emilio Calvano, Francesco Decarolis, Matt Gentzkow, Brett Gordon, Hong Jin, Garrett Johnson, Brian O’Kelley, Ariel Pakes, Marc Rysman, Carl Shapiro, Nils Wernerfelt, and seminar participants at the Knight-Georgetown Institute’s DMA and Beyond Conference, the 2024 NBER Winter Digitization meeting, the 2024 NBER Summer Institute IO meeting, Ofcom, Stanford-Berkeley IOFest, and UC San Diego for helpful comments. We are grateful for the research assistance of Levi Kiefer, Zimei Xia, Aava Farhadi, and Jenna Bowsher. We thank Ariel Azia, Lewis Jennings, Devendra Wagh, and Dionisis Kintos at Similarweb for providing Facebook and Instagram ad load statistics. Similarweb’s website is www.similarweb.com. Replication files are available from allcott.stanford.edu/research. Disclosures: Allcott and Katz were both previously employed by Microsoft Research, Allcott has previously done consulting on matters related to social media (but not related to FTC v. Meta), and Allcott is one of the (unpaid) researchers on Meta’s 2020 Facebook and Instagram Election Study. Neither author has any consulting work or other conflict of interest related to the topic of this paper. Katz acknowledges funding support from The Institute of Consumer Money Management (ICMM) Pre-doctoral Fellowship on Consumer Financial Management, awarded through the National Bureau of Economic Research. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.