An Economic Theory of Disinformation
Abstract
The impacts of misinformation and disinformation have rarely been studied in economics. In this paper, I examine these impacts using a model constructed on the basis of the concept of ranked information. The value of information is changeable and differs across people; therefore, disinformation can be used as a tool to manipulate people’s behaviors. I first define misinformation and disinformation and then show the mechanism through which disinformation decreases efficiency by manipulating ranked information. Decreases in efficiency are observed as decreases in total factor productivity, lowered success rates of investment, and increased costs of bad speculations. In addition, disinformation generates economic rents and, as a result, increases inequality, possibly by a great deal. Furthermore, disinformation can cause large-scale economic fluctuations.
References
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[22] Harashima, T. 2022b. Asymmetric Information and Ranked Information Are Equivalent in Making Information Utilization Heterogeneous. Journal of Applied Economic Sciences, 17(3): 250 – 261.
[23] Karlova, N. A. and Fisher, K. E. 2013. A Social Diffusion Model of Misinformation and Disinformation for Understanding Human Information Behavior. Information Research, 18(1). Available at: https://informationr.net/ir/18-1/paper573.html
[24] Ryan, C. D., Schau, A. J., Butner, R. and Swarthout, J. T. 2020. Monetizing disinformation in the attention economy: The case of genetically modified organisms (GMOs). European Management Journal, 38: 7-18. DOI: https://doi.org/10.1016/j.emj.2019.11.002
[25] Stiglitz, J.E. 2017. The Revolution of Information Economics: The Past and the Future. NBER Working Papers, No. 23780. Available at: https://www.nber.org/system/files/working_papers/w23780/w23780.pdf
[26] van Hoboken, J. and Ó Fathaigh, R. 2021. Regulating Disinformation in Europe: Implications for Speech and Privacy. UC Irvine Journal of International, Transnational, and Comparative Law, 6: 9–36. Available at: https://scholarship.law.uci.edu/ucijil/vol6/iss1/3/
[27] Wardle, C. and Derakhshan, H. 2017. Information Disorder: Towards an Interdisciplinary Framework for Research and Policymaking, Council of Europe. Available at: https://rm.coe.int/information-disorder-toward-an-interdisciplinary-framework-for-researc/168076277c
[28] European Commission. 2018. EU Code of Practice on Disinformation.
[2] Andersen, J. and Søe, S. O. 2020. Communicative Actions We Live By: The Problem with Fact-Checking, Tagging or Flagging Fake News - the Case of Facebook. European Journal of Communication, 35(2): 126-139. DOI: https://doi.org/10.1177/0267323119894489
[3] Becker, R. A. 1980. On the Long-run Steady State in a Simple Dynamic Model of Equilibrium with Heterogeneous Households. The Quarterly Journal of Economics, 95(2): 375–382.
[4] Cattell, R. B. 1963. Theory of Fluid and Crystallized Intelligence: A Critical Experiment. Journal of Educational Psychology, 54: 1-22. DOI: 10.1037/h0046743
[5] Cattell, R. B. 1971. Abilities: Their Structure, Growth, and Action, Houghton Mifflin, Boston.
[6] Edlin, A. and Stiglitz, J. E. 1995. Discouraging Rivals: Managerial Rent-Seeking and Economic Inefficiencies. American Economic Review, 85(5): 1301-1312. Available at: http://www.jstor.org/stable/2950990
[7] Fallis, D. 2015. What is Disinformation? Library Trends, 63(3).
[8] Grossman, S. J. and Stiglitz, J. E. 1980. On the Impossibility of Informationally Efficient Markets. American Economic Review, 70(3): 393–408. Available at: https://www.aeaweb.org/aer/top20/70.3.393-408.pdf
[9] Harashima, T. 2009. A Theory of Total Factor Productivity and the Convergence Hypothesis: Workers’ Innovations as an Essential Element. MPRA (The Munich Personal RePEc Archive) Paper No. 15508. Available at: https://mpra.ub.uni-muenchen.de/15508/
[10] Harashima, T. 2010. Sustainable Heterogeneity: Inequality, Growth, and Social Welfare in a Heterogeneous Population. MPRA (The Munich Personal RePEc Archive) Paper No. 24233.
[11] Harashima, T. 2012a. Sustainable Heterogeneity as the Unique Socially Optimal Allocation for Almost All Social Welfare Functions. MPRA (The Munich Personal RePEc Archive) Paper No. 40938.
[12] Harashima, T. 2012b. A Theory of Intelligence and Total Factor Productivity: Value Added Reflects the Fruits of Fluid Intelligence. MPRA (The Munich Personal RePEc Archive) Paper No. 43151.
[13] Harashima, T. 2016. A Theory of Total Factor Productivity and the Convergence Hypothesis: Workers’ Innovations as an Essential Element, in Japanese. Journal of Kanazawa Seiryo University, 50(1): 55–80.
[14] Harashima, T. 2017. Sustainable Heterogeneity: Inequality, Growth, and Social Welfare in a Heterogeneous Population, in Japanese. Journal of Kanazawa Seiryo University, 51(1): 31–80.
[15] Harashima, T. 2020a. Sustainable Heterogeneity as the Unique Socially Optimal Allocation for Almost All Social Welfare Functions, in Japanese. Journal of Kanazawa Seiryo University, 54(1): 71–95.
[16] Harashima, T. 2020b. A Theory of Intelligence and Total Factor Productivity: Value Added Reflects the Fruits of Fluid Intelligence, in Japanese. Journal of Kanazawa Seiryo University, 53(2): 65–82.
[17] Harashima, T. 2020c. Economic Inequality Exacerbated by Economic Rents from Exploitative Contracting. MPRA (The Munich Personal RePEc Archive) Paper No. 104178.
[18] Harashima, T. 2020d. Preventing Widening Inequality: Economic Rents and Sustainable Heterogeneity. MPRA (The Munich Personal RePEc Archive) Paper No. 103377.
[19] Harashima, T. 2021a. Preventing Widening Inequality: Economic Rents and Sustainable Heterogeneity, in Japanese. Journal of Kanazawa Seiryo University, 55(1): 17–37.
[20] Harashima, Taiji (2021b) “Economic Inequality and Heterogeneous Success Rates of Investment, MPRA (The Munich Personal RePEc Archive) Paper No. 110688.
[21] Harashima, T. 2022a. A Theory of the Credit-to-GDP Gap: Using Credit Gaps to Predict Financial Crises, MPRA (The Munich Personal RePEc Archive) Paper No. 111732.
[22] Harashima, T. 2022b. Asymmetric Information and Ranked Information Are Equivalent in Making Information Utilization Heterogeneous. Journal of Applied Economic Sciences, 17(3): 250 – 261.
[23] Karlova, N. A. and Fisher, K. E. 2013. A Social Diffusion Model of Misinformation and Disinformation for Understanding Human Information Behavior. Information Research, 18(1). Available at: https://informationr.net/ir/18-1/paper573.html
[24] Ryan, C. D., Schau, A. J., Butner, R. and Swarthout, J. T. 2020. Monetizing disinformation in the attention economy: The case of genetically modified organisms (GMOs). European Management Journal, 38: 7-18. DOI: https://doi.org/10.1016/j.emj.2019.11.002
[25] Stiglitz, J.E. 2017. The Revolution of Information Economics: The Past and the Future. NBER Working Papers, No. 23780. Available at: https://www.nber.org/system/files/working_papers/w23780/w23780.pdf
[26] van Hoboken, J. and Ó Fathaigh, R. 2021. Regulating Disinformation in Europe: Implications for Speech and Privacy. UC Irvine Journal of International, Transnational, and Comparative Law, 6: 9–36. Available at: https://scholarship.law.uci.edu/ucijil/vol6/iss1/3/
[27] Wardle, C. and Derakhshan, H. 2017. Information Disorder: Towards an Interdisciplinary Framework for Research and Policymaking, Council of Europe. Available at: https://rm.coe.int/information-disorder-toward-an-interdisciplinary-framework-for-researc/168076277c
[28] European Commission. 2018. EU Code of Practice on Disinformation.
Published
2023-06-26
How to Cite
HARASHIMA, Taiji.
An Economic Theory of Disinformation.
Theoretical and Practical Research in Economic Fields, [S.l.], v. 14, n. 1, p. 16 - 28, june 2023.
ISSN 2068-7710.
Available at: <https://journals.aserspublishing.eu/tpref/article/view/7859>. Date accessed: 09 may 2024.
doi: https://doi.org/10.14505/tpref.v14.1(27).02.
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