Bayesian Doublespeak

65 Pages Posted: 22 Apr 2022 Last revised: 19 Aug 2022

See all articles by Ing-Haw Cheng

Ing-Haw Cheng

University of Toronto - Rotman School of Management

Alice Hsiaw

Brandeis University - International Business School

Date Written: August 18, 2022

Abstract

Why does misinformation persist, and how does it distort the long-run beliefs and actions of rational agents? Suppose receivers see an infinite stream of messages from a sender of unknown type who observes private signals about an unknown state of the world. We characterize the conditions for "doublespeak" equilibria where one sender type repeatedly reveals each private signal truthfully but another sender type repeatedly fabricates false values of her private signals. Receivers only partially learn the true state in the long run irrespective of the true sender type, resulting in long-run disagreement and ex post incorrect actions by some receivers. Equilibrium fact-checking by receivers does not induce more truth-telling among sender types but reputational concerns can. Our results cast doubt on the presumption that rational agents can pierce through persistent extreme lies in the long run and highlight the deleterious effects of such lies for receiver welfare.

Keywords: Misinformation, Disinformation, Disagreement, Polarization, Fake News

JEL Classification: D82, D83

Suggested Citation

Cheng, Ing-Haw and Hsiaw, Alice, Bayesian Doublespeak (August 18, 2022). Available at SSRN: https://ssrn.com/abstract=4082225 or http://dx.doi.org/10.2139/ssrn.4082225

Ing-Haw Cheng (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

HOME PAGE: http://inghawcheng.github.io

Alice Hsiaw

Brandeis University - International Business School ( email )

Mailstop 32
Waltham, MA 02454-9110
United States

HOME PAGE: http://people.brandeis.edu/~ahsiaw/

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