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.

About the presenter's visit

Jiemai Wu will be visiting the School of Economics on Tuesday 20 August 2019. While here she will be using room 520A Colin Clark Building.  If you would like to meet with her or have lunch or dinner with her please contact Allan Hernandez Chanto who will be her host while at The University of Queensland. Allan Hernandez Chanto can be contacted on a.hernandezchanto@uq.edu.au.

About Economic Theory Seminar Series

A seminar series designed specifically for economic theory researchers to network and collaborate. 

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Level 6, Colin Clark Building (#39), UQ St Lucia campus.