Breaking Echo Chambers with Personalized News

40 Pages Posted: 7 May 2019

See all articles by Jiemai Wu

Jiemai Wu

The University of Sydney - School of Economics

Date Written: April 20, 2019

Abstract

When advancements in data analytics enable digital media to provide personalized news for readers, will they provide news that conforms to the readers' existing biases, thus creating "echo chambers"? To answer this question, this paper studies a game between a click-maximizing website and a reader who tries to learn the true state of the world. Contrary to popular belief, this paper shows that the answer is "no". It is, in fact, optimal for the website to feature headlines that contradict the reader's existing bias. This result is jointly driven by the reader's demand for learning and the website's strategy to induce clicks. On the one hand, the reader expects to learn more about the state of the world when she reads an article that contradicts her current views, even if she expects it to be less credible than an article which agrees with her views. On the other hand, by featuring surprising headlines, the website challenges the reader's belief about the true state and increases her demand to click for more information. This paper stands in sharp contrast with papers by Gentzkow and Shapiro (2006) as well as Suen (2004), which rationalize how subscription-maximizing media such as newspapers and cable TVs pander to consumers' prior biases with conforming news.

Keywords: media bias, personalized news, echo chambers

JEL Classification: C72, D83

Suggested Citation

Wu, Jiemai, Breaking Echo Chambers with Personalized News (April 20, 2019). Available at SSRN: https://ssrn.com/abstract=3375352 or http://dx.doi.org/10.2139/ssrn.3375352

Jiemai Wu (Contact Author)

The University of Sydney - School of Economics ( email )

Social Sciences Building
Room 510
Sydney, NSW 2006
Australia

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