presentationposted on 05.05.2016, 00:00 by Clayton Dexter
In an ideal world, social media would be a primary focus of consumption choices and production possibilities for any individuals in a free market system. This technology would become key in living the modern Western culture lifestyle as the information is too critical to understanding the goings-on both in markets but in the world as well. Producers should include this focus as a key component in understanding the market and reaching the most consumers. Government policy as well should include a larger social media presence. The presented findings argue that the impacts of social media help decrease inefficiencies in the market. It increases competition, increases production, and increases technological innovation. It lowers marketing costs and lowers barriers into a market. Social media technology increases the quality of the products by eliminating "lemons" and through the competition between more firms across any online market. This creates winners as the consumers get higher quality products, but the owners' of "lemons" and firms with a nonexistent online presence lose out to the increased competition. The social welfare is increased by the social media technology and policy should keep out of the application of the technology. However, public policy should try to protect the autonomy of the online services and fight against potential abuse. As the technologies grow, a risk is shown for the possibility of developing monopoly type market dominance. This should be avoided to maximize the societal gains to this technology.