In #1243188 I suggested to @k00b that we engage in a research project using SN data. The idea would be to use this data to study: A) how micropayments with real money affects internet discourse; and B) barriers to the adoption of self-custody. I also promised @Undisciplined that I'd carry out the research in public, since many people might not know what economics research looks like, and may be curious as to how the process plays out. You can follow all of the updates here.

Today I decided to look at how territory fees affect the number of posts. Are users sensitive to posting fees, or do they not care?

To do this, I would have to reconstruct the posting fee history of each territory. As I metnioned in #1250442, this is harder than it sounds because the database is not designed to keep historical records of the past. AFAIK, there is no table that records the entire history of posting fees for each territory. Thus, it needs to be inferred from the post costs that users actually paid to post in the territories.

This was, again, quite a difficult task. Posting costs can be modified for a variety of reasons. For example, if a user posts multiple times within a 10 minute window, their costs increase by 10x for each additional post. The database only records the total cost of the post, not the breakdown of why the cost was what it was. As another example, posts can be charged extra if they included large file uploads. And there were other oddities as well, like when the founder of a territory reduces the fees temporarily for their own regular posts, then raises them again. Thus, to properly get the historical posting fee for a territory in a particular period, I had to somehow account for all the reasons the paid fee might be different from the base cost.

After struggling with this for a while, I think I was able to reconstruct a fairly accurate history of each territory's daily posting fees. The histories for ~bitcoin, ~meta, ~econ, and ~BooksAndArticles is shown below. I verified with their founders that the histories look accurate.

The next natural question to ask is whether posting fees affect post quantity. Once the posting fee histories were constructed, this was pretty easy to do (thus illustrating a key principle in empirical research: the actual statistical modeling is the easy part---getting the data in the right format is the hard part!)

For each contiguous period of time in which a territory had the same posting fee (called a spell), I counted the number of posts made in that territory over that time, and divided by the number of days to get the posts per day. I then made a scatter plot where each dot is a spell, and the x-axis measures the posting fee during that spell and the y-axis measures the posts-per-day during that spell. The chart is shown below:

There is a clear downward correlation between posting fee and posts-per-day. I also highlighted spells from the top 5 territories from the month of September, illustrating that generally the correlation holds even for fee changes within the same territory. The only one here that doesn't seem to go in the right direction is ~Stacker_Sports. Maybe @grayruby raises the fee when the territory becomes popular? Haha, I'm not actually suggesting that, but it does highlight that the negative correlation is not a given, since reverse causality might imply an opposite relation.

A log-log regression of the data results in the equation \log_{10} Y = 0.41 - 0.18 \log_{10} X, where Y is posts per day and X is posting fee. These numbers imply that if you 10x the posting fee in your territory, you can expect about 33% fewer posts per day. The results suggest that users are indeed sensitive to posting fee.

To be honest, I was a little bit surprised by this result. I wasn't sure that we'd find anything because the fees are pretty small (in terms of real purchasing power). Yet, it does seem that users are responsive to even these very small changes in fees. This implies that micro-incentives really might matter for how people behave online, which is a promising sign for the rest of the research project.

As a next step, it might be interesting to see whether the actual dollar-value of the fees matters more, or the whether the sats-value matters more. I haven't figured out exactly how to do that yet, but that might be a good next step.

Other next steps would include something like whether posting fees are correlated with the quality, not just quantity, of posts.

Anyway that's all I have for today. Anyone who wants to vet the code can go to https://github.com/ed-kung/sn-research. I'll keep posting any time I spend a day doing substantial work on this project.