Aligning Platform and User Incentives in Social Media Age Restrictions

Several countries are adopting social media bans for teenagers, yet early evidence suggests limited adherence to the age-based restrictions. Such bans ask platforms to remove profitable customers and teens to give up access to their online social networks. We study an alternative regulatory regime in which platforms remain liable for teens on the adult tier but may offer a safe tier that removes restricted features, such as algorithmic feeds, while preserving interactions with their relevant network. Provision of the safe tier and enforcement are complementary: teens can adhere without giving up access to their network, and platforms can retain displaced adult-tier users as lower-margin customers. This policy design makes the teen decision to avoid the adult tier less dependent on peer dynamics and increases teen welfare for a relevant range of regulatory penalties.