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Discussion Paper
Breaking Down the Market for Misinformation
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 ...
Report
Misinformation in Social Media: The Role of Verification Incentives
We develop a model of a platform featuring producers of fake news as well as users who can share content and verify it at a cost. Since users supply news to other users, their actions affect fake news prevalence and strategic complementarities can arise: high levels of verification can lead to low prevalence of fake content, in turn inducing more unverified sharing that sustains high levels of verification. Equilibria in this market then arise as intersection points between a standard supply curve and a novel correspondence that generalizes a demand function to account for the users’ ...