MICRO/THEORY: Enabling Communication Through Content Moderation; Professor Greg Taylor (University of Oxford)

Abstract:

This paper investigates how moderation can facilitate effective communication on online platforms where users have strategic incentives to mislead. In a model where a sender communicates information to a receiver and may exert costly effort to make their message more persuasive, communication fails without moderation due to either cheap talk dynamics or excessive sender costs that deter participation. When combined with sender effort, moderation discourages misleading messages, enabling truthful communication without requiring excessive sender effort. Full information transmission can often be sustained with minimal moderation, as even limited inspection deters deception. However, excessive moderation reduces sender effort, diminishing the quality of high-effort messages that benefit receivers. An optimal moderation policy balances enough intervention to sustain truthful communication while preserving sender incentives to provide high-quality messages.