So, I’m rehashing an old topic, but one that I’ve never formally written a post about: fake news. It being 2017, the recent spats of fake news, filter bubbles, and misinformation along with (at the moment, as of May 2017, things may change) allegations of Russian interference has several pundits wondering whether we live in a “post-truth” society. So, what to do?
I see, from my vantage point at least, a lot of hand-wringing about how we can verify the truth of a claim in an era where information flows fast and violently, how to support our dying journalism industries, whether to even support our corrupt dying news industries, how to prevent state actors from perpetuating propaganda, etc. False equivalences abound and it seems like the only thing we can agree on is how we should hold our media to a higher standard but we can’t agree on what standard to use or what to measure against it. The sky is falling, God is dead, and Soylent Green is people.
But let’s reflect and turn the gaze inward. What if the issue is not the media?
Okay, I mean, the media has serious and deep institutional issues which I can’t even begin to understand let alone comment on. Sure, the media has now become an information manufacturing entity that in reality responds more to market forces than some idealization of truth or civic duty. One can argue that it has become a propaganda machine ala Noam Chomsky, but even without resorting to “leftist” claims, it is easy to see that the media will report on what it believes delivers ratings and revenue. But we driving demand. We are also part of this market.
This is my grand solution: treat reality as reality. We are part of this information market, but no market works unless there is incentive for both parties. Right now, we consume information that conforms to our preexisting worldview which creates a positive feedback loop and allows us to self-select in information we agree with and out information we don’t agree with. Eventually this narrows our scope so much that contact with any other worldview creates dramatic friction, like what we are experiencing now.
Well, supposing you buy this logic, the question now is how do we do this? My answer is to set up a betting market for the news. Imagine if one receives anonymized, randomized articles (without giveaways to the channel, author, etc) and is forced at the end to determine whether it is Democratic or Republican. Or pro-globalization or anti-globalization. Or even whether it is a joke news site or not. Swipe right or swipe left. Why would I potentially read a B.S. article from a B.S. news source? Well, I place a bet and depending on whether I am correct or not I get a payoff. News sites still disperse their content and generate ad revenue but also get valuable data as to how accurately their consumers view their place in the ecosystem.
But how do you know if you are correct? Everyone will dispute the truth of an event or thought piece. This is true, but it is much harder to dispute the political leanings of a publication on a relative scale to other publications. I think most will agree that the New Revolution is nowhere near as left as Antifa News. It is about where the article falls on a relative scale compared to its peers, so to speak.
This betting market forces the consumer to pay more attention to what he or she is consuming. Reading Fox News or CNN and thinking that it sold out which is why you now read Breitbart or Huffington Post now has a potential financial cost. Having skin in the game really forces you pay attention to your media diet. It also creates a new level of authority. I would be much more willing to listen to a man or woman who has most consistently played this game with a net profit. If nothing else, they have an accurate view of the media landscape and that insight is valuable.
I am working on two assumptions about the consumer here. One is that most consumers tend to view themselves as, if not centrist, at least comparably in the middle. I think quite often I’ll here extremes on either political side say “Yeah, but I’m not ___ .“ Seeing exactly how far off center (or on) might be a shock for these extreme ends and force them to reconsider their place in the market. The second assumption is that the general population will accept these relative ratings. I think they will, even if they may disagree on specific rankings of publications the gist of it will probably be ok. I hope.
Footnotes (i.e. Random thoughts I couldn’t fit into the above):
 An institution such as this would be a great example of a totem. It alters behavior and educates the public as an inherent feature of the system But as I said before, my fears are of icons and idols…Gambling addiction is very real…
 We should consider how the news industries would respond hypothetically. I think they would be incentivize to essentially have their consumers have an accurate view of them, not necessarily stop spreading fake news. But this effectively is what I believe already happens. Fox News, for example, fills a market by catering to a voice that feels neglected by a “mainstream” media. They don’t care about accuracy, they care about being the go-to source for their demographic. Ditto for the New Yorker, Al-Jazeera, etc.
 The stock market we have functions in a reverse sort of fashion as this proposed betting market. Those prices are volatile to news, the most recent example being the rally in the wake of Donald Trump’s election. I think this is why you see insider trading – if some get news of a particular stock whether they wanted it or not, do you expect them to not act in their best interest? The news is already connected to finance, I believe it just makes sense to make this more transparent or at least offer a secondary view of the same mechanism.
 I actually have a theory that the three main ways of addressing supply-demand markets are betting markets, “exchange” markets, and auction markets. “Exchange” markets are what we are used to seeing – commodities of a known or stable value exchanged for liquidity. Four bucks for a pet rock. Prices simply quantify this value and these exchanges aren’t as sensitive to risk. Auctions are when there is either an infinite value that needs a finite valuation or a low bar that needs to be met (construction bids). An example of the infinite value one are charity auctions – curing cancer or ending world hunger is an almost unquantifiable net positive for the world, but we can’t pay with an infinity dollar bill. The betting market is to place a value on risky or unknown values, like our fake news example. Or just when you want to trick some douche-canoe into downing a bottle so that you can draw a wang on his face when he passes out.