Social media makes its money on outrage so that's what they're optimizing for. Ban or regulate advertising (which will make it less profitable) and other, less toxic business models will come up.

Yes, this is group psychology. Only individuals can really be rational. Once individuals form a psychological group, individuality is lost, rationality is lost with it and everything is controlled by the emotions of the group.

The group has no room for anything really but for the extreme emotional reactions of in-group/out-group psychology and you see this playing out in our society because of social media.

There is literally no room for nuanced discourse between individuals with the way our social media platforms are structured. Individuals will not drive engagement the way groups do.

I think its mostly groups on social media. Some groups can be rational, like a jury, or a committee full of intelligent people. But for them to be rational, there has to be the correct incentives and culture of discussion (i.e. no social media algorithms, or divisive politics).

“Madness is something rare in individuals — but in groups, parties, peoples, and ages, it is the rule.”

― Friedrich Nietzsche, Beyond Good and Evil