The Fox News Effect Revisited: Reverse Effect of Biased Media Persuasion

This paper studies adverse effects of persuasion by the media. It combines an adjusted model of information cascades with heterogeneous agents and a model of persuasion by partisan media. I assume that the media does not convey any additional information, but when agents hear the news that correspond to their personal beliefs, they become overconfident in their private signals. Such an approach refers to a model of partisan media – a news agency that has clear preferences over the actions that individuals make, regardless of the true state of the world. The paper shows that partisan media persuasion can have two adverse effects: (i) after it intervenes, the people who agree with the media on the first place become less capable of persuading others because the listeners attribute the beliefs of the speakers to the media propaganda; (ii) the people who openly disagree with the media become more convincing when the media increases the intensity of persuasion, as the deviant actions reveal stronger contrary beliefs. The paper shows that under certain network structure of the society, it might be optimal for the media not to persuade even if it can.