The last twenty years have seen the rise of scaled social media platforms powered by advertising revenue. The size and business model of these platforms have generated widespread concern across the political spectrum. Engagement algorithms may contribute to political extremism by promoting polarizing and/or misleading content (Acemoglu et al 2021, Azzimonti and Fernandes 2021, Levy 2021), and may lead to more polarizing news being produced by media outlets (Abreu and Jeon 2019). Access to mobile platform applications may have accelerated polarization and knowledge gaps across zipcodes (Melnikov 2021). Platforms’ engagement strategies may induce addictive behavior and lead to decreases in user well-being (Allcott et al 2020, Allcott et al 2021). Platforms’ moderation policies might be more effective at increasing engagement than at deterring harmful behavior (Jimenez 2021). The market dominance of the largest platforms may crowd out smaller search and social media platforms (Aridor 2021).

The emerging evidence about the platforms’ welfare effects may enable the design of new tools that can support healthier social media environments. Facebook users can be encouraged to follow counter-attitudinal news outlets, leading to reductions in polarization (Levy 2021). Exposing Wikipedia contributors to counter-attitudinal content reduces the bias in their subsequent contributions (Greenstein et al 2021). Accuracy nudges reduce the sharing of inaccurate information on Twitter (Pennycook et al 2021). Applications allowing users to restrict time spent on social media platforms can be made more effective by instituting delays before platform access is resumed (Allcott et al 2021).

The emerging work on digital platforms also indicates that the platforms can provide important benefits. Social media users have higher levels of political knowledge when they are active on the platforms (Allcott et al 2020). The platforms can also support freedoms of expression and assembly in repressive societies. Egyptian dissidents used Twitter to organize protests in Tahrir Square between 2011 and 2015 (Acemoglu et al 2018). The spread of VKontakte, the dominant Russian online social media platform, increased the frequency of collective actions in Russia in 2011 (Enikolopov et al 2020). The launch of Facebook in a language spoken by the majority of a country’s citizens increased the frequency of collective actions and decreased violent conflict in repressive societies (Fergusson and Molina 2021).

The emerging experimental evidence about digital platforms may lead to new policy and regulatory strategies aimed at protecting consumer well-being and ensuring competition in markets for attention (e.g., Romer 2021). Legislative efforts to address the potential harms from digital platforms while preserving their benefits require evidence about the likely effects of alternative regulatory strategies. At the present moment this evidence is relatively scant. The Digital Platforms Initiative supports research that evaluates the welfare effects of digital platforms (both harmful and beneficial), and that considers the potential implications of findings both for new tools that can be deployed by private and nonprofit entities, and for new policy and regulatory frameworks.