Misinformation

hao li, university of toronto
wei li, university of california, riverside

Abstract

A candidate has private information about her own quality and about her rival's quality. She can run an informative campaign which generates a public signal about either her quality ("positive campaign'') or that of her rival ("negative campaign''). Both the type of campaign and its informativeness are signals about the qualities of the candidates. In a separating equilibrium, a candidate runs a positive campaign if she has a good signal about her own quality and a negative campaign if she has a bad signal about her rival's quality. When the candidate has both good news about herself and bad news about her rival, the type of the campaign generally depends both on the accuracies of her private signals and on relative accuracy, but with a small marginal cost of running more informative campaigns, the candidate chooses a positive campaign if her good news is more accurate than her bad news and a negative campaign if the reverse is true. Competing campaigns are less informative in equilibrium than unopposed campaigns, because misinformation is less effective when countered by competing campaigns.