Proposal: a market for truth to address false ads on social media

Abstract

At one extreme, Twitter rejects all political ads no matter how important the message. At the other extreme, Facebook accepts all political ads no matter how untruthful the message. As lies in political advertising become increasingly problematic, neither policy works. The former prevents us from hearing newcomers while the latter pollutes our discourse with misinformation. This short article proposes a "market for truth" that would allow social media platforms to take political ads, guarantee the ads are lie free, and at the same time absolve such platforms of responsibility for deciding what's true. Using mechanism design, it causes advertisers to either internalize their negative externalities or to signal that they are untrustworthy. It also provides a business model that should make fact-checking scalable and profitable. This short precis is a segment of a longer treatise on the problem of fake news.