1. Home
  2. Studies
  3. Social Media, Markets and Minors: A Behavioral Ethics Perspective
IW-Policy Paper No. 12 6. November 2025 Barbara Engels / Jennifer Potthoff Social Media, Markets and Minors: A Behavioral Ethics Perspective

Social media has become a central infrastructure of adolescence, offering benefits such as social connection, informal learning, creative expression, and low-cost entrepreneurial opportunities, while simultaneously posing risks including depression, body image concerns, and opaque commercial persuasion.

Download PDF
The
IW-Policy Paper No. 12 6. November 2025 Barbara Engels / Jennifer Potthoff

Social Media, Markets and Minors: A Behavioral Ethics Perspective

Barbara Engels / Jennifer Potthoff German Economic Institute (IW) German Economic Institute (IW)

Social media has become a central infrastructure of adolescence, offering benefits such as social connection, informal learning, creative expression, and low-cost entrepreneurial opportunities, while simultaneously posing risks including depression, body image concerns, and opaque commercial persuasion.

By combining behavioral business ethics with digital economics, this study explores how platform and creator incentives can be aligned with the well-being and developing autonomy of young people without undermining innovation.

Social media platforms, creators and influencers often exploit developmental vulnerabilities, creating potential market failures and undermining trust in digital markets. Ethical evaluation shows that protecting young people’s autonomy and dignity requires categorical duties (deontological lens) such as prohibiting manipulative design, dark patterns, and covert monetization – combined with proportionate, welfare-maximizing interventions (utilitarian lens). Current EU and German frameworks provide guidance but leave enforcement gaps, particularly in design patterns, age assurance, and transparency in the creator economy. Effective policy measures include default “Young User Mode” settings, dual disclosure of influence and content provenance, targeted restrictions for high-risk advertising, and scaled media-literacy programs. Together, these policies realign incentives toward innovation-compatible, healthier engagement models, embedding youth well-being as a design constraint and strengthening trust in digital markets within a social market economy framework.

Download PDF
The
IW-Policy Paper No. 12 6. November 2025 Barbara Engels / Jennifer Potthoff

Social Media, Markets and Minors: A Behavioral Ethics Perspective

Barbara Engels / Jennifer Potthoff German Economic Institute (IW) German Economic Institute (IW)

More about this topic

More about this topic

Read the article
The Honesty-Attitude-Behavior Gap: A Cross-Country Comparison
IW-Trends No. 3 29. September 2026 Dominik Enste / Jennifer Potthoff / Augustin Renz

The Honesty-Attitude-Behavior Gap: A Cross-Country Comparison

Honesty reduces transaction costs and is therefore a prerequisite for effective economic cooperation.

Dominik Enste / Jennifer Potthoff / Augustin Renz IW

Read the article
IW-Trends No. 4 10. January 2026 Jennifer Potthoff / Rebecca Gabel

Life Satisfaction in Germany: Trends, Influencing Factors and Political Relevance

Despite their country’s multiple crises, Germans' subjective well-being remains overall buoyant and is currently reaching historic highs similar to those of the 2010s.

Jennifer Potthoff / Rebecca Gabel IW

More about this topic

Content element with id 9713