Working Paper

Opinion Dynamics via Search Engines (and other Algorithmic Gatekeepers)

Fabrizio Germano, Francesco Sobbrio
CESifo, Munich, 2017

CESifo Working Paper No. 6541

Ranking algorithms are the information gatekeepers of the Internet era. We develop a stylized model to study the nterplay between a ranking algorithm and individual clicking behavior. We consider a search engine that uses an algorithm based on popularity and on personalization. The analysis shows the presence of a feedback effect, whereby individuals clicking on websites indirectly provide information about their private signals to successive searchers through the popularity-ranking algorithm. Accordingly, when individuals provide sufficiently positive feedback to the ranking algorithm, popularity-based rankings tend to aggregate information while personalization acts in the opposite direction. Moreover, we find that, under fairly general conditions, popularity-based rankings generate an advantage of the fewer effect: fewer websites reporting a given signal attract relatively more traffic overall. This highlights a novel, ranking-driven channel that can potentially explain the diffusion of misinformation, as websites reporting incorrect information may attract an amplified amount of traffic precisely because they are few.

CESifo Category
Behavioural Economics
Economics of Digitization
Keywords: ranking algorithm, information aggregation, asymptotic learning, popularity ranking, personalized ranking, misinformation, fake news
JEL Classification: D830