Combating Misinformation Through Digital Markets

Marshall Van Alstyne, Allen and Kelli Professor in Information Systems, recently presented research at Harvard Law School’s Berkman-Klein Center, where he discussed market-based interventions to combat misinformation online without censorship or central authority.

In his presentation, Van Alstyne addressed the pervasive issue of misinformation in the digital age and its wider societal consequences, including inciting violence and undermining public health. He proposed a novel mechanism that creates a meta-layer of platform governance designed to mitigate the spread of false information while incentivizing the dissemination of credible content.

Van Alstyne critiqued existing approaches, such as fact-checking and media literacy programs, arguing that they are ineffective against the “arms race” between misinformation and detection technologies. He contends that the real challenge lies not just in the misinformation itself, but in the harmful externalities it generates—such as the damaging effects on third parties, including the fostering of insurrections or public health crises driven by false claims.

Drawing on Ronald Coase’s theory of property rights, Van Alstyne introduced a decentralized solution for the “marketplace of ideas.” His proposal involves assigning property rights over attention, granting both speakers the right to be heard and listeners the right to choose or reject information.

The essence of his model introduces two new rights: First, listeners gain the right to be free from harmful or misleading content and to avoid sources they don’t trust. At the same time, speakers gain the right to be heard, even if a listener chooses to exercise their right to avoid hearing them—provided the speaker can “warrant” the truth of their claims, with financial penalties for falsehoods. This balance between enhancing the listener’s freedom from misinformation and expanding the speaker’s freedom to share their message creates a healthier equilibrium between the rights of both parties. It represents an increase in rights on both sides, but with the condition that these rights are exercised responsibly. This approach, in turn, incentivizes the creation of more responsible and truthful content.

Van Alstyne concluded by suggesting that this approach could be implemented through peer adjudication and financial stakes, ultimately promoting accuracy and reducing the spread of misinformation. His proposal offers a more accountable, decentralized framework for managing the flow of information online without the need for centralized regulation or censorship.