Michael Bailey, who is an economist at Facebook, reports on Quora:
I currently (Feb 2014) manage the economics research group on the Core Data Science team. We are a small group of engineer researchers (all PhDs) who study economics, business, and operations problems. As Eric Mayefsky mentioned, there are various folks with formal economics training spread across the company, usually in quantitative or product management roles.
The economics research group focuses on four research areas:
Core Economics – modeling supply and demand, operations research, pricing, forecasting, macroeconomics, econometrics, structural modeling.
Market Design – ad auctions, algorithmic game theory, mechanism design, simulation modeling, crowdsourcing.
Ads and Monetization – ads product and frontend research, advertiser experimentation, social advertising, new products and data, advertising effectiveness, marketing.
Behavioral Economics – user and advertiser behavior, economic networks, incentives, externalities, and decision making under risk and uncertainty.
I think a more interesting question is “what *could* an economist at Facebook do?” because there is a LOT of opportunity. There are incredibly important problems that only people who think carefully about causal analysis and model selection could tackle. Facebook’s engineer to economist ratio is enormous. Software engineers are great at typical machine learning problems (given a set of parameters and data, make a prediction), but notoriously bad at answering questions out of sample or for which there’s no data. Economists spend a lot of time with observational data since we often don’t have the luxury of running experiments and we’ve honed our tools and techniques for that environment (instrumental variables for example). The most important strategic and business questions often rely on counterfactuals which require some sort of model (structural or otherwise) and that is where the economists step in.
tl;dr economists at Facebook compute counterfactuals.