Perverse Ethical Concerns: Online Platforms and Offline Conflicts

Chang, Dongkyu and Vong, Allen (2021): Perverse Ethical Concerns: Online Platforms and Offline Conflicts.

Abstract

We study a model where many citizens learn a hidden state individually on an online platform. The platform slants news and imperfectly filters misinformation, triggering conflicts about the state among the citizens. We show that a platform that faces an ethical concern to internalize conflict costs could perversely aggravate conflicts. This cautionary observation highlights that societal efforts to mitigate conflicts, such as investments in ethical algorithms, public awareness campaigns, and government policies, are effective if and only if their implementations are sufficiently aggressive.

• Item Type: MPRA Paper
• Language: English
• Keywords: platforms, social media, polarization, conflicts
• Subjects: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search ; Learning ; Information and Knowledge ; Communication ; Belief ; Unawareness; L - Industrial Organization > L8 - Industry Studies: Services > L86 - Information and Internet Services ; Computer Software

References

Anderson, S. P., Waldfogel, J. and Strömberg, D. (2015). Handbook of Media Economics, Elsevier.

Andreoni, J. and Mylovanov, T. (2012). Diverging Opinions, American Economic Journal: Microeconomics 4(1): 209–32.

Bakshy, E., Messing, S. and Adamic, L. A. (2015). Exposure to Ideologically Diverse News and Opinion on Facebook, Science 348(6239): 1130–1132.

Baliga, S., Hanany, E. and Klibanoff, P. (2013). Polarization and Ambiguity, American Economic Review 103(7): 3071–83.

Bursztyn, L., Egorov, G., Enikolopov, R. and Petrova, M. (2019). Social Media and Xenophobia: Evidence from Russia, Technical report, National Bureau of Economic Research.

Chen, H. and Suen, W. (2021). Competition for Attention and News Quality, Technical report, Working Paper, University of Hong Kong.

Cripps, M. W., Ely, J. C., Mailath, G. J. and Samuelson, L. (2008). Common Learning, Econometrica 76(4): 909–933.

Cusumano, M., Gawer, A. and Yoffie, D. (2021). Social Media Companies Should Self-Regulate. Now., Harvard Business Review.

Dixit, A. K. and Weibull, J. W. (2007). Political Polarization, Proceedings of the National Academy of Sciences 104(18): 7351–7356.

Funke, D. and Flamini, D. (2021). A Guide to Anti-misinformation Actions around the World, Poynter.

Gentzkow, M. and Shapiro, J. M. (2006). Media Bias And Reputation, Journal of Political Economy 114(2): 280–316.

Gentzkow, M. and Shapiro, J. M. (2010). What Drives Media Slant? Evidence from US Daily Newspapers, Econometrica 78(1): 35–71.

Gentzkow, M., Shapiro, J. M. and Stone, D. F. (2015). Media Bias in the Marketplace: Theory, Handbook of Media Economics, Vol. 1, Elsevier, pp. 623–645.

Holmström, B. (1999). Managerial Incentive Problems: A Dynamic Perspective, The Review of Economic Studies 66(1): 169–182.

Karell, D. (2021). Online Extremism and Offline Harm, Social Science Research Council.

Kartik, N., Lee, F. X. and Suen, W. (2021). Information Validates the Prior: A Theorem on Bayesian Updating and Applications, American Economic Review: Insights 3(2): 165–82.

Kartik, N., Ottaviani, M. and Squintani, F. (2007). Credulity, Lies, and Costly Talk, Journal of Economic Theory 134(1): 93–116.

Kearns, M. and Roth, A. (2019). The Ethical Algorithm: The Science of Socially Aware Algorithm Design, Oxford University Press.

Lang, J., Erickson, W. W. and Jing-Schmidt, Z. (2021). #MaskOn!#MaskOff! Digital Polarization of Mask-wearing in the United States during COVID-19, PloS one 16(4): e0250817.

Little, A. T. (2017). Propaganda and Credulity, Games and Economic Behavior 102: 224–232.

MacCarthy, M. (2020). Transparency Requirements for Digital Social Media Platforms: Recommendations for Policy Makers and Industry, Working paper, Transatlantic Working Group .

Mullainathan, S. and Shleifer, A. (2005). The Market for News, American Economic Review 95(4): 1031–1053.

Müller, K. and Schwarz, C. (2018). Fanning the Flames of Hate: Social Media and Hate Crime, Journal of the European Economic Association.

Müller, K. and Schwarz, C. (2020). From Hashtag to Hate Crime: Twitter and Anti-minority Sentiment, Working paper, Bocconi University.

Napoli, P. M. (2019). Social Media and the Public Interest, Columbia University Press.

Perego, J. and Yuksel, S. (2021). Media Competition and Social Disagreement, Working paper, Columbia Business School.

Prat, A. and Strömberg, D. (2013). The Political Economy of Mass Media, Advances in Economics and Econometrics 2: 135.

Sethi, R. and Yildiz, M. (2012). Public Disagreement, American Economic Journal: Microeconomics 4(3): 57–95.

Settle, J. E. (2018). Frenemies: How Social Media Polarizes America, Cambridge University Press.

Suen, W. (2004). The Self-Perpetuation of Biased Beliefs, The Economic Journal 114(495): 377–396.

Sunstein, C. R. (2001). Republic.com, Princeton University Press.

Sunstein, C. R. (2018). # Republic, Princeton University Press.

Wu, T. (2017). The Attention Merchants: The Epic Scramble to Get Inside Our Heads, Vintage.

Zanardo, E. (2017). How to Measure Disagreement?, Working paper, Columbia University.

Zhuravskaya, E., Petrova, M. and Enikolopov, R. (2020). Political Effects of the Internet and Social Media, Annual Review of Economics 12: 415–438.