Some Economics of Echo Chambers
Martin Richardson and
Frank Stähler
Journal of Institutional and Theoretical Economics (JITE), 2021, vol. 177, issue 2, 205-219
Abstract:
This paper analyzes competition between a media firm providing true information (news) and two fake-news providers that create echo chambers. Information from the media firm is uncertain but truthful, and consumers enjoy confirmation of their prior beliefs due to cognitive dissonances. We show that, even if real news is more valued than fake news, entry by fake-news providers becomes more profitable with increased variance of information. Furthermore, a public news provider makes entry for fake-news providers harder than for a profit-maximizing media firm.
Keywords: media; fake news; echo chamber (search for similar items in EconPapers)
JEL-codes: D21 L15 L82 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:
Downloads: (external link)
https://www.mohrsiebeck.com/en/article/some-econom ... 101628jite-2021-0004
Fulltext access is included for subscribers to the printed version.
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:mhr:jinste:urn:doi:10.1628/jite-2021-0004
Ordering information: This journal article can be ordered from
Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany
DOI: 10.1628/jite-2021-0004
Access Statistics for this article
Journal of Institutional and Theoretical Economics (JITE) is currently edited by Gerd Mühlheußer and Bayer, Ralph-C
More articles in Journal of Institutional and Theoretical Economics (JITE) from Mohr Siebeck, Tübingen
Bibliographic data for series maintained by Thomas Wolpert ().