Social Media and Misleading Information in a Democracy: A Mechanism Design Approach

In this article, we present a resource allocation mechanism to incentivize misinformation filtering among strategic social media platforms and, thus, to indirectly prevent the spread of fake news. We consider the presence of a strategic government and private knowledge of how misinformation affects the users of the social media platforms. Our proposed mechanism strongly implements all generalized Nash equilibria for efficient filtering of misleading information in the induced game, with a balanced budget. We also show that for quasi-concave utilities, our mechanism implements a Pareto efficient solution.