Economics Seminar（2018-16）

Topic:Creating Confusion: Information Manipulation and Imperfect Coordination

Speaker:Yang LU, the Hong Kong University of Science and Technology

Time:Tuesday,Oct.23, 13:30-15:00p.m

Place:Room 217, Guanghua Building 2

Abstract:

We develop a tractable model of information manipulation in which a politician wants to prevent the consumers of news from acting on their information. The politician can manipulation the media information at a cost, but cannot commit to an information structure. The consumers of news are rational and internalize the politician’s incentives in forming their strategies. In the unique equilibrium of the game, the news consumers’beliefs are unbiased but are noisier due to the politician’s manipulation. We argue that new media technologies that simultaneously improve the precision of the media’s information and yet at the same time make it easy for the politician to propagate alternative facts end up making the politician better off and everybody else worse off. In this situation, the consumers of news possess more than enough information to make informed decisions but their actions reflect little or no actual information. However, if the costs of information manipulation can be maintained above a certain level, new media technologies that improve the precision of the media’s information help to reduce equilibrium manipulation and can even turn the politician’s media strategy backfire entirely, giving the politician incentives to seek for commitment devices to not manipulate at all.

Introduction:

Professor YANG Lu is an Associate Professor of the Department of Economics in the Hong Kong University of Science and Technology. Her research interests are Information and Learning in Macroeconomics and Finance, Empirical Macroeconomics and Finance.

//yanglu.people.ust.hk/

Your participation is warmly welcomed!