This article frames the problem of news dissemination as a problem of market lemons, analogous to the issue raised by George Akerlof in 1970. Framing news as a mechanism of vetting common knowledge as opposed to entertainment allows one to see that instant common knowledge in the byzantine and uncertain way in which humans communicate and live in is unattainable. Given this frame of the problem a potential solution is posited which allows traditional newspaper companies to serve and focus on the role of validating news rather than simply creating or capturing it. The most value added service that traditional news organizations can provide is validation of truth and quality assurance.
“It is hard to get the news from poems, but everyday, men die miserably for lack of what can be found there.” (William C. Williams)
Gauging quality of entertainment is fairly simple and self-evident. Consumers know instantly whether a product is entertaining and consumers continue to pay attention if they find the material to be entertaining.
News providers tend to serve both an individual’s desire for entertainment and information in one product bundle. Although it is very easy for consumers to test the quality of the entertainment component of news it is much more difficult to gauge the information quality of news.
Consumers face the intangible dilemma of assessing whether news is accurate or true, which poses a problem of asymmetric information for consumers. Continue reading