Conferences at Department of Economics, University of Toronto, Canadian Economic Theory Conference 2022

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A Rational Inattention Theory of Echo Chamber

Lin Hu, Anqi Li, Xu Tan*

Last modified: 2022-04-17


Finite players gather information about an uncertain state before making

decisions. Each player allocates his limited attention capacity between biased

sources and the other players, and the resulting stochastic attention network

facilitates the transmission of information from primary sources to him either

directly or indirectly through the other players. The scarcity of attention leads

the player to focus on his own-biased source, resulting in occasional cross-

cutting exposures but most of the time a reinforcement of his predisposition.

It also limits his attention to like-minded friends who, by attending to the

same primary source as his, serve as secondary sources in case the information

transmission from the primary source to him is disrupted. A mandate on

impartial exposures to all biased sources disrupts echo chambers but entails

ambiguous welfare consequences. Inside an echo chamber, even a small amount

of heterogeneity between players can generate fat-tailed distributions of public

opinion, and factors a ecting the visibility of sources and players could have

unintended consequences for public opinion and consumer welfare.

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