Abstract
This paper analyzes the implications of interventions that affect the costs of misreporting. I study a model of communication between an uninformed voter and a media outlet that knows the quality of two competing candidates. The alternatives available to the voter are endogenously championed by the two candidates. I show that higher costs may lead to more misreporting and persuasion, whereas low costs result in full revelation. The voter may be better off when less informed because of higher costs. When the media receives policy-independent gains, interventions that increase misreporting costs never directly harm the voter. However, lenient interventions that increase these costs by small amounts can be wasteful of public resources. Regulation produced by politicians leads to suboptimal interventions.
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Financial support for this research is indicated in the acknowledgement footnote. The author has no other relevant financial or non-financial interests to disclose. The author does not analyse or generate any datasets, because the work proceeds within a theoretical and mathematical approach.
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Santiago Oliveros provided invaluable guidance, support, and help. For helpful comments and suggestions, I thank Yair Antler, Leonardo Boncinelli, Luca Ferrari, Christian Ghiglino, Johannes Hörner, Aniol Llorente-Saguer, Simon Lodato, Marina G. Petrova and participants at the Conference on Mechanism and Institution Design 2020, Formal Theory Virtual Workshop, Royal Economic Society Annual Conference 2021, GRASS XIV Workshop, Centre for Studies in Economics and Finance, 2021 European Winter Meetings of the Econometric Society, 61st Annual Conference of the Italian Economic Association, the 17th European Meeting in Game Theory, and the 12th World Congress of the Econometric Society. I also thank the editor and two anonymous referees for constructive guidance. All errors are mine. This project has received funding from the European Union’s Horizon 2020 Research and Innovation Programme (Marie Skłodowska-Curie grant no. 843315-PEMB).
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Vaccari, F. Influential news and policy-making. Econ Theory (2023). https://doi.org/10.1007/s00199-023-01499-9
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DOI: https://doi.org/10.1007/s00199-023-01499-9
Keywords
- Fake news
- Misreporting
- Media
- Policy-making
- Regulation
- Disinformation
JEL Classification
- D72
- D82
- D83
- L51