The attention economy is often blamed for the severe deterioration of credible, high-quality content on social media. This is a bit perplexing. I give my attention to some platforms in exchange for some entertaining content. The exchange itself seems perfectly innocuous, sounds like a textbook win-win situation. Where did everything go wrong? Contrary to public opinion, I argue that the credibility crisis does not stem from the game of maximizing attention per se. Instead, the underlying problem comes from a market failure that plagues the attention market. A risk of using attention as currency is that it must be ‘paid’ before a consumer can evaluate the content's quality. You cannot determine if a post is entertaining or credible until you have seen it. Yet, once your attention is spent, the transaction is complete; you cannot claw it back even if the content is sloppy or false. This is a kind of information asymmetry. Economic theories show that information asymmetry often lead to adverse selection, a situation where low-quality goods inevitably squeeze out high-quality ones. This presentation will demonstrate how such market failure happens on social media, and how it ultimately fosters the rampant spread of misinformation and fake news online.
