A rational inattention theory of echo chamber

Abstract

We develop a rational inattention theory of echo chamber, whereby players gather information about an uncertain state by allocating limited attention capacities across biased primary sources and the other players. The resulting Poisson attention network transmits information from the primary source to a player either directly or indirectly through the other players. Rational inattention generates heterogeneous demands for information among players who are initially biased towards different decisions. In an echo chamber equilibrium, each player restricts attention to his own-biased source and like-minded friends, as the latter attend to the same primary source as his, and so could serve as secondary sources in case the information transmission from the primary source to him is disrupted. We provide sufficient conditions that give rise to echo chamber equilibria, characterize the attention networks within echo chambers, and use our results to inform the design and regulation of information platforms.