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Persuasion under the Influence of Fake News: Competitive Persuasion under Source Uncertainty

Author

Listed:
  • Sangjun Yea

    (Korea Institute for International Economic Policy)

  • Daeyoung Jeong

    (Yonsei University)

Abstract

We study Bayesian persuasion with source uncertainty: a receiver observes one message but cannot tell whether it came from a related news sender, who commands an informative technology, or a fake news sender, whose signals are state-independent. Using a Rothschild-Stiglitz approach, we characterize equilibrium and identify the threshold prominence at which fake news becomes persuasive. Prominent fake news dilutes informative signals, but a sufficiently credible sender preserves influence by raising precision. This self-disciplining effect raises welfare: paradoxically, within the persuasive regime, greater prominence of fake news improves the informational environment and leaves voters better informed ex-ante.

Suggested Citation

  • Sangjun Yea & Daeyoung Jeong, 2026. "Persuasion under the Influence of Fake News: Competitive Persuasion under Source Uncertainty," Working papers 2026rwp-295, Yonsei University, Yonsei Economics Research Institute.
    • Handle: RePEc:yon:wpaper:2026rwp-295
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    References listed on IDEAS

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    More about this item

    Keywords

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    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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