Truth, Lies, and Social Ties: When Image Concerns Fuel Fake News

Dana Sisak and Philipp Denter

Papers from arXiv.org

Abstract: We study how social image concerns shape information sharing among peers. Individuals receive a signal about a binary state of the world characterized by both a direction and a veracity status. While the direction is freely observable, verifying veracity is costly and depends on individual type. We consider two distinct social image motives: a desire to appear competent and a desire to signal one's worldview. For each motive, we characterize equilibrium sharing behavior and derive implications for the quality of shared information. We identify conditions under which false news is shared more frequently than factual news (e.g., Vosoughi et al., 2018). Both competence- and worldview-based motives can rationalize such patterns, though they yield empirically distinct sharing behaviors and different welfare implications. Finally, we derive testable predictions for each motive and discuss how these align with existing empirical evidence.

Date: 2024-10, Revised 2025-11
New Economics Papers: this item is included in nep-mic
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