Information Sharing with Social Image Concerns and the Spread of Fake News

Abstract: We study how social image concerns influence information sharing between peers. Individuals receive a signal about a binary state of the world, characterized by a direction and a veracity status. While the direction is freely observable, verifying veracity is costly and type-dependent. We examine two types of social image motives: a desire to appear talented -- i.e., able to distinguish real from fake news -- and a desire to signal one's worldview. For each motive, we characterize equilibrium sharing patterns and derive implications for the quality of shared information. We show that fake news may be shared more frequently than factual news (e.g., Vosoughi et al., 2018}). Both ability- and worldview-driven motives can rationalize this behavior, though they lead to empirically distinct sharing patterns and differing welfare implications.