Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/176968
Authors: 
Long, Ngo Van
Richardson, Martin
Stähler, Frank
Year of Publication: 
2018
Series/Report no.: 
CESifo Working Paper 6949
Abstract: 
We construct a Hotelling-type model of two media providers, each of whom can issue fake and/or real news and each of whom can invest in the debunking of their rival’s fake news. The model assumes that consumers have an innate preference for one provider or the other and value real news. However, that valuation varies according to their bias favoring one provider or the other. We demonstrate a unique subgame perfect Nash equilibrium in which only one firm issues fake news and we show, in this setting, that increased polarization of consumers - represented by a wider distribution - increases the prevalence of both fake news and debunking expenditures and is welfare reducing. We also show, inter alia, that a stronger preference by consumers for their preferred provider lowers both fake news and debunking. Finally, we compare monopoly and duopoly market structures in terms of “fake news” provision and show that a public news provider can be welfare improving.
Subjects: 
fake news
media
debunking
JEL: 
D21
L15
L82
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.