Working Paper: CEPR ID: DP14210
Authors: Gene M. Grossman; Elhanan Helpman
Abstract: Misinformation pervades political competition. We introduce opportunities for political can-didates and their media supporters to spread fake news about the policy environment andperhaps about partiespositions into a familiar model of electoral competition. In the baselinemodel with full information, the partiespositions converge to those that maximize aggregatewelfare. When parties can broadcast fake news to audiences that disproportionately includetheir partisans, policy divergence and suboptimal outcomes can result. We study a sequence ofmodels that impose progressively tighter constraints on false reporting and characterize situa-tions that lead to divergence and a polarized electorate.
Keywords: Electoral Competition; Fake News; Policy Positions
JEL Codes: D78
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| introduction of fake news (Y20) | parties' positions diverge (D72) |
| parties' positions diverge (D72) | suboptimal outcomes (I14) |
| fake news (Y50) | distort parties' announcements (D72) |
| distort parties' announcements (D72) | affect voter perceptions (K16) |
| affect voter perceptions (K16) | lead to polarization (D72) |
| reporting constraints (C24) | divergence in party positioning (D72) |
| divergence in party positioning (D72) | affect policy outcomes (D78) |