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Creating confusion

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Listed:
  • Edmond, Chris
  • Lu, Yang K.

Abstract

We develop a model in which a politician seeks to prevent a group of citizens from making informed decisions. The politician can manipulate information at a cost. The citizens are rational and internalize the politician's incentives. In the unique equilibrium of the game, the citizens' beliefs are unbiased but endogenously noisy. We interpret the social media revolution as a shock that simultaneously (i) improves the underlying, intrinsic precision of the citizens' information, but also (ii) reduces the politician's costs of manipulation. We show that there is a critical threshold such that if the costs of manipulation fall enough, the social media revolution makes the citizens worse off despite the underlying improvement in their information.

Suggested Citation

  • Edmond, Chris & Lu, Yang K., 2021. "Creating confusion," Journal of Economic Theory, Elsevier, vol. 191(C).
    • Handle: RePEc:eee:jetheo:v:191:y:2021:i:c:s0022053120301381
    DOI: 10.1016/j.jet.2020.105145
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    References listed on IDEAS

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    More about this item

    Keywords

    Persuasion; Bias; Noise; Social media; Fake news; Alternative facts;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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