Fake News, Lemons, and Tipping Points
Amid a veritable cascade (har har) of blog posts on Facebook’s fake news problem, I was tickled by Forbes’ take on the matter.
To recap: ever since Facebook switched to an automated news-selecting algorithm, fake news stories have been doing a good job of crowding out real ones. One million people shared the (fake) story about Pope Francis endorsing Trump, for instance. On the whole, this isn’t a surprise: news stories go viral when they hit the right sorts of emotional buttons in people’s brains to make them pass the stories on to their friends, and a fake news story has an easier time of doing that than a real one. After all, being constrained by reality only hinders your ability to induce the strong emotions that get people talking about a piece. It also doesn’t hurt that a real news story has to be backed by hours of investigative research, analysis, and writing, whereas a fake news story can be written with none of those pesky (and expensive) requirements. All you need is one bored person with a free afternoon.
At some point, this is going to cause a problem for Facebook News, if it isn’t already. People don’t want to read fake news, and they’d rather not have to filter out the real from the fake themselves (especially if most of the stories that get passed around are fake). This is analogous to the “lemons” problem we’ve been discussing in class—the fake news is not only outcompeting the real news in terms of volume, it’s going to drive down people’s willingness to be engaged in Facebook News at all. Why go there if there fake news problem is so bad? Why would “sellers” of real news work hard to get their articles out to many people on social media when reader engagement is dropping? As we’ve seen, this can cause a positive feedback loop chain reaction where the top-level content producers leave the market one after the other, because the average good is so bad that buyers are uninterested in participating. This drives out the new top-tier sellers, and so on, until only the worst goods (articles) are left in the market.
Socially, this is obviously a problem. But what’s the big deal for Facebook, business-wise? Facebook’s ubiquity makes it seem far-fetched right now, but the social network might not be around forever. The Internet has graveyards full of networking sites that crashed and burned, like MySpace, even when they were once thriving. We can understand how this happens from the tipping point model we discussed in class—in good times, these websites can generally recover from small losses of users, because there is market pressure on people to keep joining. If enough people leave at once, however, the network effect becomes too small to matter to potential users, and people are instead pressured to leave, accelerating the network’s demise. It’s hard to turn things around at this point.
To the extent that Facebook has to deal with existential threats, this should probably be near the top of its list. Facebook can only plausibly die out in the near future if some earth-shattering event causes its userbase to flee quickly and in large numbers, causing its network effect to be too small to appeal to new users. Maybe in a world still rocked by the US presidential election, people are becoming disillusioned with how they’ve tuned out from reality—in an era of increased partisanship, living in political echo chambers, and of course, fake news. Given how badly things could go for Facebook if that does cause people to log out en masse, it would be impertinent for Facebook’s staff not to be concerned about it.
https://www.forbes.com/sites/howardhyu/2016/11/17/fake-news-and-the-future-of-facebook/#7b9b37f64ce6