The Demand for Political Misinformation is a Bigger Danger than the Supply

There has been widespread concern in recent years that misinformation and fake news on social media are threatening democracy. Rick Hasen has just published a book. Low Speech: Disinformation and Politics: What is the Cure?This is a significant addition to the existing literature. Hasen and other experts argue that there are public and private ways to reduce misinformation spread on social media. Hasen however advocates for more limited regulatory steps than most commentators.

Recent symposium Low-cost SpeechProfessor Guy-Uriel Char, Harvard Law School, explains on the Balkinization Blog how the case can be weakened by the fact that misinformation is more of a threat than the supply.

I…. I wonder what we should think of the disinformation/misinformation problem if we accept that there is a market for political information that is functioning efficiently, and that it isn’t market failure. Rick frame the question this way. Rick refers to cheap speech “speech that’s both affordable and has a low social value.” (21) He frames the problem as one of market failure due to information asymmetry (30).  His model is a groundbreaking paper written by George Akerlof (the Nobel Prize-winning economist), entitled The Market for “Lemons”, Quality Uncertainty, and the Market Mechanism.  In that famous paper Akerlof explored how the information asymmetry between sellers and buyers with respect to the quality of certain goods might result in a market in which lower quality goods overwhelm high quality goods and in a reduction in the size of the market. As an example, buyers in used cars don’t know if the seller has a trustworthy vehicle, or are selling a lemon. You can make a lower price offer to hedge against the possibility that you are buying a lemon.  Sellers of quality cars may not be able to make a sale because they aren’t likely to get paid. The absence of sellers of quality cars leaves sellers of lemons in the market…..

My understanding of the Akerlof model which presumes consumers are looking for high-quality cars is not correct for thinking about disinformation and political misinformation.  There is no doubt that there are some voters interested in accurate political information.  However, there is likely a greater number of voters that do not want truthful political information.   We know, for example,  that there is a relationship between partisanship and misinformation (see, e.gHere, here and here. Literature and discussions have been held about the importance of motivating reasoning in the assessment of the accuracy of information.see, e.gHere vs. here As some researchers demonstrated, there may also be an asymmetrical demand (see, e.gHere and here, conservative and Republican voters are more inclined to believe misinformation. There is also evidence of partisan imbalance in the treatment of misinformation.  If voters are filtering information based upon their partisanship or other identities that are salient to them or if they are seeking information that is consistent with their priors, then the Akerlof model is less apt….

If voters want information that confirms or matches their pasts, the market works flawlessly. Market failure is not possible, as the market provides exactly what people need.  Republicans want and receive the information that they desire; Democrats are interested in and can get it.  All can live in the echo chamber. No one should be exposed to ideas and information that make them feel uncomfortable.  This is not the way to manage a democracy.

Low-cost SpeechThis book is very compelling by itself. Rick’s detailed explanation raises questions about whether Rick has the correct model to understand the problem. If misinformation causes a demand problem or if there is both, supply side only solutions won’t solve the problem.  Similarly, to the extent that we have a supply-side problem, then demand-side solutions are not going to suffice…

It is possible that disinformation about politics is as much about voters’ preferences than it is about politicians or social media platforms. This makes the solution to the problem more difficult.  The modern democracies have trouble determining what to do when the voters are getting exactly what they want. This is actually a problem for democracy. If you want to resolve the problem, tweaking the law and depending on private ordering are not the best options.  Instead, structural and economic reforms will be the priority.

Charles is correct in almost all of his points. Similar arguments have been made by me, as well, such that you can find them here, here, or here. Popularity of misinformation about politics is a result of demand rather than supply. This is also why it has been around for so long and could have been even more serious in times when newspapers and radio were dominant. Twitter and Facebook did not allow the spreading of disinformation and lies that supported fascism, communism and other highly harmful ideologies.

Charles has also rightly emphasized that Akerlof’s “market to lemons” is an inappropriate analogy for market for political data. The truth about the condition and history of the used car is important to potential buyers. Potential buyers of used cars have strong incentives and will seek the truth because it can impact their decision to buy or sell the vehicle.

The low likelihood that anyone will vote in an election means that most people who consume political information do not view themselves as truth-seekers. They are instead “political supporters” and will endorse any position that either supports them or puts the opposition party and its supporters in a negative light. These biases are not just for ordinary voters; they also affect policymakers, politicians, and other highly-skilled people.

Recent years have seen a rise in right-wingers being able to deceive others. This was evident with Donald Trump’s lies regarding how he “stole” the 2020 election. Charles was not my example. I don’t think the problem is less common for left-leaning people. According to social science, biases in evaluating political information are roughly equally common across political parties. Both sides are more vulnerable to misinformation that reinforces their pasts. My book discusses 9/11 truthrism, which appeals disproportionately to the Left. Democracy and Public IgnoranceGMO food claims should be strictly restricted or banned because they are more hazardous than natural ones.

Charles has it right. To address this demand-side issue, “structural and economic reforms” are required. It is not likely to make a difference to restrict social media because misinformation demand can be easily met by other producers. Fox News is a broadcast media company that likely spreads right-wing misinformation more than any social media platform.  It is not uncommon for left-wing misinformation to be spread via traditional media. In fact, people access their information via TV or other media outlets more than social media.

The theory is that government regulators can suppress all misinformation, no matter if the producers are new media or traditional media. However, these policies could cause constitutional issues and give political leaders huge power over information spread. They are more likely to use the power to support parties or policies rather than objectively promote truth in an “neutral” manner. You don’t have to trust the Republicans, even if the Democratic Administration is acting responsibly.

Previous writings include my book about political ignorance and an article more recently. National AffairsAs a structural reform advocate, I believe that more people should be able to vote in formats that allow them to “vote as they choose.” This will give voters greater incentive to search for information and to evaluate it critically. You can do this by decentralizing government power and allowing people to choose more issues.

Akerlof’s problem with the “market to lemons” is an example of how information can be mitigated by foot voting. Market mechanisms that provide accurate, impartial evaluations of used vehicles have developed over the years because used car buyers are motivated to find out truth. Akerlof is wrong to fear that good used cars are being driven away by lemons.

So, when I last sold an old car of my own, the buyer and I went to an independent mechanic to assess its condition. Because the buyer was motivated to sell it, he also wanted to get an objective expert to review its report. Very few voters will spend the time or effort necessary to assess political information. If there were more political markets for lemons and less political markets, misinformation would not be as serious a threat.