Misinformation – the rampant spread of which exacerbated the ill-effects of the pandemic since the onset of COVID-19, led the WHO to declare that the world is not just fighting an epidemic but an infodemic.1 “We’re not just battling the virus,” said the World Health Organization Director-General, “we’re also battling the trolls and conspiracy theorists that push misinformation and undermine the outbreak response.”
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Not just during the pandemic, but vicious effects of fake news and misinformation were also rampant during the 2014 Indian elections and 2016 US elections (Rajan, 2019; Allcott and Gentzkow, 2017, respectively). While its impact may not be as visible in the daily state of affairs, its ill-effects are specially compounded during stressful situations for the economy. For instance, in India, social media was populated with fake theories and information about COVID-19’s origin as well as spread, and its remedies too, when the country started experiencing a sudden rise in its number of COVID-19-infected cases.
As reported by BOOM (a fact-checking website), since the onset of this health crisis in the country, approx. 35% of the total fact checks that they conducted, were fake videos, while 29% were counterfeit images. To top it all, after the well-known Tablighi incident, a significant part of such fake news was targeted to a particular minority. Thus, what should have been a collective fight against the global pandemic had now turned into a drama caused by the fake news menace!2 Similarly, the study by Vaccine Confidence Project has been very influential in this regard. It found that a vast majority of more than 240 million digital/social media messages regarding the spread of the COVID-19 pandemic, that were exchanged globally by mid-March 2020, were deceitful or misleading.
Turning to the economic aspect of the topic, the poor performance of a country’s macroeconomic indicators is usually attributed to poor-quality inputs, obsolete technologies, uncompetitive producers, inadequate government support, and the like, but what also multiplies the negative effects are the reactions and decisions of individuals in the economy. Individuals are resources for an economy, and any misinformation is bound to alter their performance. While the planners primarily focus on country-level indicators, sound policy analysis should also consider the role of individuals and their behavior who shape the economy, rather than a one size fits all approach, especially in a country like India that has its idiosyncrasies.
Though the spread of fake news (with several instances in our mythologies such as Mahabharata and Ramayana turning the course of events) is a rather ancient phenomenon, various economists and psychologists have also started taking cognizance of the same. With the advent of social networks and other social media that have positively impacted the growth of online news reading and sharing, attention to fact-checking has taken a backseat, with humans falling prey to various biases. Traditional economics models these humans as rational decision-makers, who always make the correct choices from the given information, pay full attention, possess complete information, have unlimited cognitive capabilities, and complete self-control. They are, however, deemed as econs by behavioral economists, who view humans as distinct from such econs.
In contrast to econs, humans routinely err due to certain cognitive biases.3 Even in his Nobel Laureate address, Professor Richard Thaler stated that “To do good economics, you have to keep in mind that people are human.” Lack of complete information/inability to verify the veracity of the information for humans already suffering from biases complicates the situation further. Since humans err, they either underreact or overreact to any news. In fact, in the present context of the COVID-19 pandemic, some started panicking and hoarding food materials leading to scarcity in the markets/locking themselves down completely and not going to work at all, while others paid no heed to the risk of the virus and took the situation lightly, leading to increased cases and deaths. Optimal reaction and hence, appropriate decision making, took a backseat. Due to such biases, it is imperative to tackle this misinformation as the negative effect gets multiplied.
It is in this light that we emphasize the role of misinformation in the present times, from a behavioural economics perspective. Examining the adverse effects of the same (especially in terms of fake info about potential cures for the virus, which is even deadlier than theories on where it originated, and how it has been playing a dominant role in influencing electoral outcomes in the recent past), we touch upon some studies in the domain,4 while also discussing potential ways to tackle the spread of this misinformation.
First and foremost, it is essential to understand the difference between misinformation and disinformation. These two terms are often used interchangeably, but they are different in their intent. While the former reflects the spread of false/deceitful information, irrespective of the intention to deceive someone, disinformation, on the contrary, refers to the deliberate spread of misleading/biased information such as manipulated facts and propaganda. However, at the same time, given how humans (not econs) behave in reality, it seems plausible to think that not everyone who shares the so-called disinformation with others, carries such bad intentions.
As in the case of misinformation, it is very likely for the receiver of information to believe the false content (without critically thinking about its sources)5 and pass it onto others (the case of what can be referred to as dis-mis(sed)-information). Thus, what was disinformation to begin with, actually gets spread as misinformation because the receiver or the spreader of information misses out on some important information. Figure 1 picturizes this scenario and shows that a substantial part of DIS-information gets spread among the general public as misinformation. Here, we assume (like our standard textbooks do) that the size of DIS-information is smaller than that of MIS-information because there are very few ill-minded individuals who aim to benefit themselves via such a channel.
Figure 1: Dis-Information & Mis-Information
Note: Here, the red-bordered circle represents the total size of disinformation, out of which approx. 3/4th of the content (the blue-shaded region within the circle) represents the dis-mis(sed)-information. The big triangle with a black outline shows the size/spread of misinformation in the society under consideration.
The reason why we (somewhat) digressed from our main topic is that the extant literature contains several studies in the political arena that have discussed how fake news/falsified posts (and, of course, in most of the cases, here the so-called fake news/posts have originated with some bad intentions) create numerous hurdles, distorting the decision-making process in democracies. The point made then is that, though these posts arise with a specific purpose, the majority of those who spread it fall prey to the deliberately created disinformation, further spreading it as misinformation, without critically analysing or checking its veracity, as it may resonate with their prior beliefs, thus creating unfavourable outcomes. Several studies also mention that harbouring stringent political ideologies are responsible for the harmful effects of misinformation (Iyenger and Hahn, 2009; Bakshi, Messing and Adamic, 2015; Flynn, Nyhan and Reifler, 2017).
Social media, as a conduit to spread fake news, has been much researched. A 2017 survey by New York University and Stanford researchers reported that approx. more than 40% of total visits to fake news channels came from social media, compared to 10% of visits to US’ leading news sites. Added to this, the fake news stories even enjoy a wider reach, as highlighted by even wider research on its implication for the 2016 American presidential election.6
Blake (2018), for instance, mentions in his article about a first of its kind study that looks at the role of fake news in affecting voter choices, and it indeed made a significant difference in depressing votes for Clinton. The study reported that approximately 4% of all those who supported President Obama during the 2012 elections, were persuaded not to vote for Hillary Clinton in 2016 by believing in false news pieces. Using data on 171 million tweets collected during the 2016 election period, Bovet
and Makse (2019) also showed that approx. 18% of those tweets contained a link to some news webpage, of which 25% were found to spread too biased or fake news items. Further, their research also found that Mr. Trump’s supporters were successful in influencing the dynamics of leading spreaders of false information. They mention that several investigations and theoretical modelling on misinformation, due to social networks, document the so-called confirmation bias, and social influence often results in the creation of social communities that form echo chambers.7
Such behavioral insights, as discussed, are significant as they could be used to inform public policy, wherein the government and other private interventions could carefully nudge agents (humans) to reach closer to optimal solutions for the economy. Well, the WHO and UN have done their fair share to prevent the spread of such info!8 In this line, one of the recent works by Pennycook et al. (2020) recruited 1700 US adults online and found that while determining what to share, participants almost failed in distinguishing between true and false content of the information than when they were directly asked about accuracy.
Another interesting finding was that subjects with higher cognitive reflection and scientific knowledge had stronger truth discerning powers. Further, a second study established that simple accuracy nudges before inferring the accuracy of any headline (here, related to COVID-19 pandemic or electoral decision making) significantly affects the participants’ level of true discernment and hence, their subsequent sharing intentions too. Such nudges are low-cost, and while important for individual health outcomes, they are crucial for overall social welfare as well.
However, as is true with other areas of research, here too, the North seems to have taken a lead, while as a society not exposed to responsible sharing as that of first world countries, with a rapidly expanding social media base, but improper regulation of social media platforms, misinformation seems to be more lethal for underdeveloped or other emerging economies in the South (one obvious example is India). The religious factors and other superstitions make the situation even more grave, thus warranting immediate research!
- Many conspiracy theories and fake news were doing the rounds since the onset of COVID-19 in Dec 2019. Ingesting bleach as a potential solution to fight the virus was one such fake news. Similarly, hydroxychloroquine was touted as a potential remedy for the treatment, following which there were reports of people passing away from ingesting fish tank cleaning products containing chloroquine. Another instance in Iran was reported where hundreds died post intake of methyl alcohol, which was looked at as the cure for COVID-19, on social media. The outbreak was a population control scheme by Bill Gates and the Pirbright Institute in England was also one such claim. Added to this was the misreporting of morbidity and mortality numbers. In India, in particular, fake news on the consumption of chicken leading to COVID-19 spread, actually caused chicken prices to fall, with an estimated loss of Rs. 2000 crores to chicken farmers. Drinking cow urine to cure the disease also showed up on social media. Added to such economic costs, were political costs such as social media platforms depicting the Tablighi Jamaat group as ‘corona villains’ as their congregation led to a spike in cases.
- The International Fact Checking Network (IFCN) actually compiled the fake news data on social media into categories:
- content about causes, symptoms, cures, spread of the virus, misrepresentation of comments, photos, videos of politicians & conspiracy theories blaming certain country, group or community for the spread (Sahoo, 2020).
- One such cognitive bias, in the present case, that humans fell prey to is ‘confirmation bias’ (to recall and favour information that supports one’s prior beliefs). While drinkers believed alcohol is the cure, red meat and cocaine were other such suggested cures (people want to justify behaviours they want to engage in anyway), those politically inclined against China attributed the outbreak to Wuhan while some believed it was planted by US.
- It is observed that misinformation has primarily been studied in the context of politics and the spread of diseases.
- Law of less work might be at play here. Behavioural economic research focuses on actions that are chosen to minimise exertion or any form of work. While this was originally thought to be true for physical work, empirical literature supports this for cognitive work as well. Though the basic idea originated in psychology, variants of it are found in economics as well (i.e., exertion of effort is aversive/associated with disutility).
- According to a Buzzfeed analysis, top 20 fake news stories had more shares, reactions and comments on Facebook than the 20 top hard news stories (Kurtzleben, 2018).
- Echo chambers are such bubbles/closed systems which are insulated from any contradictory beliefs, and hence, any belief gets reinforced due to hearing same perspectives and opinions over and over again.
- The UN has come up with an initiative called ‘Pause’ intended to getting people to stop and think about what they’re sharing about COVID-19 on social media. ‘Verified’ is another such initiative that invites people to become ‘information volunteers’ and share UN-verified, science-based content. WHO has created a page called ‘MythBusters’ containing fact-based answers to common misconceptions about COVID-19 such as whether shoes can spread the virus (very low likelihood), if hand dryers kill the virus (no, they don’t)!
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