DP14210 Electoral Competition with Fake News

• Gene M. Grossman Elhanan Helpman
18 Dec 2019

Misinformation pervades political competition. We introduce opportunities for political can-
didates and their media supporters to spread fake news about the policy environment and
perhaps about parties’positions into a familiar model of electoral competition. In the baseline
model with full information, the parties’positions converge to those that maximize aggregate
welfare. When parties can broadcast fake news to audiences that disproportionately include
their partisans, policy divergence and suboptimal outcomes can result. We study a sequence of
models that impose progressively tighter constraints on false reporting and characterize situa-
tions that lead to divergence and a polarized electorate.