Discussion Paper

Breaking Down the Market for Misinformation

Abstract: The spread of misinformation online has been recognized as a growing social problem. In responding to the issue, social media platforms have (i) promoted the services of third-party fact-checkers; (ii) removed producers of misinformation and downgraded false content; and (iii) provided contextual information for flagged content, empowering users to determine the veracity of information for themselves. In a recent staff report, we develop a flexible model of misinformation to assess the efficacy of these types of interventions. Our analysis focuses on how well these measures incentivize users to verify the information they encounter online.

Keywords: misinformation; social media; news verification; regulation;

Bibliographic Information

Provider: Federal Reserve Bank of New York

Part of Series: Liberty Street Economics

Publication Date: 2022-11-28

Number: 20221128