This paper analyzes how fake news may have an effect on individual decisionmaking in the political sphere. To this end, arguments from the standard model of voter behaviour with full rationality are discussed as well as arguments from Behavioural Political Economy, which incorporates systematic psychological biases. It is argued that, by and large, the main problem resulting from fake news will not be persuasion, but confirmation. Individuals may demand fake news in order to confirm settled beliefs that they already hold. In a next step, the possible unintended consequences of extensive regulation of fake news are discussed. It is argued that, besides standard arguments such as rent-seeking, a major problem is that the government takes a paternalistic stance towards citizens. Also, the vagueness of the concept of fake news implies that a prosecution of fake news providers or distributors will suffer from arbitrariness and lead to an erosion of free speech. Finally, it is shown that the existing empirical evidence on the vulnerability of citizens for manipulation through fake news does not warrant any major government intervention into the political discourse.

Schnellenbach, Jan, On the Behavioural Political Economy of Regulating Fake News (September 17, 2017). Ordo – Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, Forthcoming. Available at SSRN: