The Editor vs. the Algorithm: Targeting, Data and Externalities in Online News

18 Pages Posted: 17 Jun 2019

See all articles by Jörg Claussen

Jörg Claussen

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management); Copenhagen Business School - Department of Innovation and Organizational Economics

Christian Peukert

University of Lausanne (HEC)

Ananya Sen

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: June 5, 2019

Abstract

We run a field experiment with a major news outlet to quantify the economic returns to data and informational externalities associated with algorithmic recommendation. Automated recommendation can outperform a human editor in terms of user engagement, though this crucially depends on the amount of training data. Limited individual data or breaking news leads the editor to outperform the algorithm. Additional data helps algorithmic performance but decreasing economic returns set in rapidly. Investigating informational externalities highlights that personalized recommendation reduces consumption diversity. Moreover, users associated with lower levels of digital literacy and more extreme political views engage more with algorithmic recommendations.

Keywords: Field experiment; Economics of AI; Returns to data; Filter Bubbles

Suggested Citation

Claussen, Jörg and Peukert, Christian and Sen, Ananya, The Editor vs. the Algorithm: Targeting, Data and Externalities in Online News (June 5, 2019). Available at SSRN: https://ssrn.com/abstract=3399947 or http://dx.doi.org/10.2139/ssrn.3399947

Jörg Claussen

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management) ( email )

Kaulbachstr. 45
Munich, DE 80539
Germany

Copenhagen Business School - Department of Innovation and Organizational Economics ( email )

Kilevej 14A
Frederiksberg, 2000
Denmark

Christian Peukert (Contact Author)

University of Lausanne (HEC) ( email )

Unil Dorigny, Batiment Internef
Lausanne, 1015
Switzerland

Ananya Sen

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-416
Cambridge, MA 02142
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
359
Abstract Views
1,926
rank
102,218
PlumX Metrics