UCL School of Management is delighted to welcome David Godes, University of Maryland, to host a research seminar discussing ‘Media bias in the presence of feedback.’
Gentzkow and Shapiro (2006) argue that feedback reduces the incentives for a media outlet to publish biased information. The intuition behind this result is that – assuming consumers place value on finding outlets that will provide true reports with high probability – the outlet should shade reports toward the priors of the public. When feedback – the revelation of the “truth” – is available, there is no reason to shade the report in this way. The authors also provide empirical data in support of this result. In contrast, in this paper, we make the assumption that some consumers seek outlets that provide reports that are biased. In such a setting, we find that feedback actually facilitates biased reports and that, in some cases, the absence of feedback leads to more-truthful news. One important implication of these results is that truthful revelations may not only not reduce the proliferation of “fake news” but may instead increase it. Finally, we provide empirical evidence for bias employing a dataset from a context in which feedback is prevalent: American football (NFL) score predictions.