Fake News, Voter Overconfidence, and the Quality of Democratic Choice
Title: Fake News, Voter Overconfidence, and the Quality of Democratic Choice (with Jean-Robert Tyran)
Abstract: This paper studies, theoretically and experimentally, the effects of overconfidence and fake news on information aggregation and the quality of democratic choice in a common-interest setting. We theoretically show that overconfidence exacerbates the adverse effects of widespread misinformation (i.e., fake news). We then analyze richer models that allow for partisan biases, targeted misinformation intended to sway public opinion, and news signals correlated across voters (due to media ownership concentration or censure). In our experiment, overconfidence severely undermines information aggregation suggesting that collective decision-making with overconfidence can result in much more extreme outcomes than the aggregate of individual outcomes with overconfidence.