Social Media and Misleading Information in a Democracy: A Mechanism Design Approach

Abstract

In this paper, we present a resource allocation mechanism for the problem of incentivizing filtering among a finite number of strategic social media platforms. We consider the presence of a strategic government and private knowledge of how misinformation affects the users of the social media platforms. Our proposed mechanism incentivizes social media platforms to filter misleading information efficiently, and thus indirectly prevents the spread of fake news. In particular, we design an economically inspired mechanism that strongly implements all generalized Nash equilibria for efficient filtering of misleading information in the induced game. We show that our mechanism is individually rational, budget balanced, while it has at least one equilibrium. Finally, we show that for quasi-concave utilities and constraints, our mechanism admits a generalized Nash equilibrium and implements a Pareto efficient solution.