Working Paper: NBER ID: w28465
Authors: Renee Bowen; Danil Dmitriev; Simone Galperti
Abstract: We study learning via shared news. Each period agents receive the same quantity and quality of first-hand information and can share it with friends. Some friends (possibly few) share selectively, generating heterogeneous news diets across agents akin to echo chambers. Agents are aware of selective sharing and update beliefs by Bayes' rule. Contrary to standard learning results, we show that beliefs can diverge in this environment leading to polarization. This requires that (i) agents hold misperceptions (even minor) about friends' sharing and (ii) information quality is sufficiently low. Polarization can worsen when agents' social connections expand. When the quantity of first-hand information becomes large, agents can hold opposite extreme beliefs resulting in severe polarization. We find that news aggregators can curb polarization caused by news sharing. Our results hold without media bias or fake news, so eliminating these is not sufficient to reduce polarization. When fake news is included, it can lead to polarization but only through misperceived selective sharing. We apply our theory to shed light on the evolution of public opinions about climate change in the US.
Keywords: Belief Polarization; Information Sharing; Social Connections
JEL Codes: D82; D83; D90
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| selective sharing + misperceptions about friends' sharing behaviors (C92) | incorrect learning and belief polarization (D83) |
| low information quality (L15) | incorrect learning and belief polarization (D83) |
| low information quality (L15) | beliefs converge (F62) |
| low information quality + unbalanced echo chambers (D83) | beliefs move apart over time (B00) |
| expansion of social connections (Z13) | exacerbation of polarization (D72) |
| high information quality (L15) | some agents learn correctly (C73) |
| high information quality (L15) | increase polarization (F69) |
| news aggregators (C43) | mitigate polarization (D74) |