Information Inundation on Platforms and Implications

37 Pages Posted: 3 Jun 2019 Last revised: 1 Aug 2019

See all articles by Gad Allon

Gad Allon

University of Pennsylvania - The Wharton School

Kimon Drakopoulos

University of Southern California

Vahideh Manshadi

Yale School of Management

Date Written: April 1, 2019

Abstract

In this paper we study a model of information consumption where consumers sequentially interact with a platform that offers a menu of signals (posts) about an underlying state of the world (fact). At each time, incapable of consuming all posts, consumers screen the posts and only select (and consume) one from the offered menu. We show that in the presence of uncertainty about the accuracy of these posts, and as the number of posts increases, adverse effects such as slow learning and polarization arise. Specifically, we establish that, in this setting, bias emerges as a consequence of the consumer’s screening process. Namely, consumers, in their quest to choose the post that reduces their uncertainty about the state of the world, choose to consume the post that is closest to their own beliefs. We study the evolution of beliefs and we show that such a screening bias slows down the learning process, and the speed of learning decreases with the menu size. Further, we show that the society becomes polarized during the prolonged learning process even in situations where the society’s belief distribution was not a priori polarized.

Keywords: information platforms, Bayesian learning, opinion dynamics, polarization

Suggested Citation

Allon, Gad and Drakopoulos, Kimon and Manshadi, Vahideh, Information Inundation on Platforms and Implications (April 1, 2019). Available at SSRN: https://ssrn.com/abstract=3385627 or http://dx.doi.org/10.2139/ssrn.3385627

Gad Allon

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

Kimon Drakopoulos (Contact Author)

University of Southern California ( email )

2250 Alcazar Street
Los Angeles, CA 90089
United States

Vahideh Manshadi

Yale School of Management ( email )

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States

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