Updates from Chicago Booth

Why fake news is bad for business
By Rose Jacobs – Many social-media websites struggle to maximize user engagement while minimizing the amount of misinformation shared and re-shared. The stakes are high for Facebook, Twitter, and their rivals, which generate most of their revenue from advertising. Viral content leads to higher user engagement, which in turn leads to more advertising revenue.

But content-management algorithms designed to maximize user engagement may inadvertently promote content of dubious quality—including fake news.

The researchers’ models assume platform operators can tell the difference between factual and fictitious posts. They demonstrate that engagement levels fall when users aren’t warned of posts that contain misinformation—to levels lower than when users are discouraged from clicking on the dubious material.

A limitation of the research is the models’ assumption that the people using social networks and the algorithms running them know whether posts are true, false, or shaded somewhere in between. more>


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