Addiction to a Network *

Abstract

We characterize dynamic rational addiction to a harmful product by informed individuals who are connected to a network of users of the addictive product. The network's accumulated stock of consumption harms each individual and imposes peer pressure on her to consume the addictive product. When harm is concave in such stock, an increase in the network intensies addiction, and when it is sufciently convex, a larger network mitigates addiction. Rehabilitation, achieved by disconnection from the network, can prevent addiction if implemented early enough. The results support regulation of social media platforms' practices encouraging expansion of the individual's network and use.

Keywords: network, addiction, peer pressure, fear of missing out, social media platforms, inuencers, rehabilitation, dynamic programming. JEL Classication Numbers: L14, C61, C73, K13, K29

JEL Classification: L14, C61, C73, K13, K29