Economics of Social Media Fake Accounts.

This article analyzes the problem of fake social media accounts within the influencer economy, where influencers may purchase fake followers to artificially boost their perceived popularity. Using a game-theoretical signaling model involving consumers, influencers (categorized as high- or low-quality), advertisers, and a social media platform, the study examines influencers' fake account purchasing behaviors, the platform's antifake efforts, and their effects on consumer welfare and platform profitability. It identifies three equilibrium regimes—pooling (low-quality influencers mimic high-quality ones by buying fake accounts), costly separating (high-quality influencers buy fake accounts defensively to prevent mimicry), and naturally separating (no fake accounts purchased)—and shows that increasing antifake efforts can paradoxically increase fake account prevalence before eventually reducing it. The research finds that purely profit-driven platforms prefer no antifake effort and pooling equilibria, while consumer-oriented platforms may invest in antifake measures but generally less than what consumers would prefer; additionally, improving antifake technology benefits both platforms and consumers, whereas raising social media literacy or fake account costs can have complex, sometimes counterintuitive effects. Extensions to multiple influencer types and repeated interactions suggest the robustness of these insights, which have implications for platform policies, regulatory approaches, and consumer protection strategies.