Online interactions and the gravity model

We study digital interactions between people across the globe. We develop a simple model of online interactions that incorporates insights from communication studies and can be tested using the structural gravity model used in international economics. To estimate our model, we calculate the volume of online interactions between players in different countries and within a country, using a unique individual-level dataset from over 25 million multiplayer matches in the game Age of Empires II: Definitive Edition. We find that cultural proximity and external social networks are crucial in shaping online interactions, even when physical trade costs are negligible. This suggests that the same factors underlying physical trade flows continue to matter online. Our insights offer broader implications for digital globalization, marketing strategies of online platforms, and the evolution of online communities.