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The Impact of AI and Digital Platforms on the Information Ecosystem

In: The Economics of Transformative AI

Author

Listed:
  • Joseph E. Stiglitz
  • Màxim Ventura-Bolet

Abstract

We develop a tractable model to study how AI and digital platforms impact the information ecosystem. News producers — who create truthful or untruthful content that becomes a public good or bad — earn revenue from consumer visits. Consumers search for information and differ in their ability to distinguish truthful from untruthful information. AI and digital platforms influence the ecosystem by: improving the efficiency of processing and transmission of information, endangering the producer business model, changing the relative cost of producing misinformation and altering the ability of consumers to screen quality. We find that in the absence of adequate regulation (accountability, content moderation, and intellectual property protection) the quality of the information ecosystem may decline, both because the equilibrium quantity of truthful information declines and the share of misinformation increases; and polarization may intensify. While some of these problems are already evident with digital platforms, AI may have different, and overall more adverse, impacts.
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Suggested Citation

  • Joseph E. Stiglitz & Màxim Ventura-Bolet, 2025. "The Impact of AI and Digital Platforms on the Information Ecosystem," NBER Chapters, in: The Economics of Transformative AI, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:15317
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    References listed on IDEAS

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    1. Joan Calzada & Ricard Gil, 2020. "What Do News Aggregators Do? Evidence from Google News in Spain and Germany," Marketing Science, INFORMS, vol. 39(1), pages 134-167, January.
    2. Stiglitz, J.E., 1989. "Using Tax Policy To Curb Speculative Short-Term Trading," Papers t2, Columbia - Center for Futures Markets.
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    More about this item

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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