The Impact of AI and Digital Platforms on the Information Ecosystem

We develop a tractable model to study how AI and digital platforms impact the information ecosystem. News producers—who create truthful or untruthful content that becomes a public good or bad—earn revenue from consumer visits. Consumers search for information and differ in their ability to distinguish truthful from untruthful information. AI and digital platforms influence the ecosystem by: improving the efficiency of processing and transmission of information, endangering the producer business model, changing the relative cost of producing misinformation and altering the ability of consumers to screen quality. We find that in the absence of adequate regulation (accountability, content moderation, and intellectual property protection) the quality of the information ecosystem may decline, both because the equilibrium quantity of truthful information declines and the share of misinformation increases; and polarization may intensify. While some of these problems are already evident with digital platforms, AI may have different, and overall more adverse, impacts.