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
finitenumberofstrategicsocialmediaplatforms.Weconsiderthe
presenceofastrategicgovernmentandprivateknowledgeofhow
misinformation affects the users of the social media platforms.
Ourproposedmechanismincentivizessocialmediaplatforms 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
isindividuallyrational,budgetbalanced,whileithasatleast one
equilibrium. Finally, we show that for quasi-concave utilities and
constraints, our mechanism admits a generalized Nash
equilibrium and implements a Paretoefficient solution.