CeDEx Seminar - Melis Kartal (Vienna University of Economics and Business)

Fake News, Voter Overconfidence, and the Quality of Democratic Choice

(joint with Jean-Robert Tyran)

Abstract: We theoretically and experimentally study 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. We study extensions that allow for partisan biases, targeted misinformation intended to move public opinion in a specific direction, and correlated news signals representing media ownership concentration. In our experiment, voters are exposed to correct news or misinformation (i.e., fake news). The extent to which a subject is likely to observe correct news depends on their cognitive ability. Without overconfidence, more cognitively able subjects are predicted to vote while less able subjects are predicted to abstain, and information is predicted to aggregate well. We provide evidence that overconfidence induces misinformed subjects to vote excessively, thereby severely undermining information aggregation.