This paper analyses the effect of information disseminated by the Internet on voting behavior. We address endogeneity in Internet availability by exploiting regional and technological peculiarities of the preexisting voice telephony network that hinder the roll-out of fixed-line broadband...

We construct a Hotelling-type model of two media providers, each of whom can issue fake and/or real news and each of whom can invest in the debunking of their rival's fake news. The model assumes that consumers have an innate preference for one provider or the other and value real news. However,...

We document that trust in public institutions — and particularly trust in banks, business and government — has declined over recent years. U.S. time series evidence suggests that this partly reflects the pro-cyclical nature of trust in institutions. Cross-country comparisons reveal a clear...

This study uses an original state-level data set to investigate whether press coverage on trials for tax evasion by celebrities affects the likelihood that other tax payers participate in Germany’s tax amnesty program. To identify the causal effect, we use exogenous variation in the reporting,...

Many political commentators diagnose an increasing polarization of the U.S. electorate into two opposing camps. However, in standard spatial voting models, changes in the political preference distribution are irrelevant as long as the position of the median voter does not change. We show that...

Beliefs are a central determinant of behavior. Recent models assume that beliefs about or the anticipation of future consumption have direct utility consequences. This gives rise to informational preferences, i.e., preferences over the timing and structure of information. Using a novel and...

This paper reports on experiments testing the viability of markets for cheap talk information. We find that the poor quality of the information transmitted leads to a collapse of information markets. The reasons for this are surprising given the previous experimental results on cheap-talk games....

We investigate the dynamics of prices, information and expectations in a competitive, noisy, dynamic asset pricing equilibrium model with long-term investors. We argue that the fact that prices can score worse or better than consensus opinion in predicting the fundamentals is a product of...

Economists usually think that rational voters have little incentives to acquire costly information. We present a theoretical model to show that, in contrast to this widely held belief, rational voters acquire considerable amounts of information if media technology is available because then they...