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Field
Abstract
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Before
According to recent surveys, despite considering made-up news more problematic than terrorism, illegal immigration, racism or sexism, the vast majority of Americans feel confident in their ability to detect fake news. However, the literature in economics and psychology shows that people hold motivated beliefs about self and ego-relevant aspects, ranging from IQ to attractiveness, which typically lead the average person to exhibit overconfidence about own abilities or characteristics. Motivated by this evidence, our aim is to answer the following question: Do individuals have accurate beliefs about their ability to discern true and false news? Imprecise beliefs about own sensitivity to false news may have non-negligible effects on individual economic behavior, as well as aggregate welfare. To this end, we employ a representative sample of the US population to conduct a survey with an incentivized fake news detection task. This allows us to estimate people's prior beliefs and actual ability to correctly assess the accuracy of the information content of the news presented to them. We also explore whether prior beliefs and actual fake news detection ability are predicted by individual characteristics (e.g. income, education, cognitive reflection) and the intensity of social media use. Finally, we study whether subjects update beliefs, change fake news detection performance, as well as economic decisions, in response to a signal about own true fake news detection ability.
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After
Employing a representative US online panel, we document strong imprecision in people's beliefs about their ability to assess the accuracy of news headlines. With a randomised information experiment, we show that revelation of the true ability causally adjusts beliefs and improves their precision. The effect is stronger for subjects who are overconfident about own ability and this is driven by gender differences in the reaction to this information. Finally, we also  find that the provision of information on ability increases the willingness to pay for an insurance against the risk of being harmed by misinformation, among risk-averse participants.
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