Københavns Universitet
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Attention Economics and Fake News

Lecture — The ceremonial lecture at The Annual Commemoration 2017 given by professor Vincent F. Hendricks.

Your Majesty, dear minister, dear board, university rector, dear students, honored colleagues, ladies and gentlemen.

I’m very honored to address this distinguished body at the occasion of the annual celebration of The University of Copenhagen.

I will be reporting on a topic of growing concern to us all – the current state of the information age – or should I say the information market – a market for both prime as well as defective information products; from individual verified facts in accordance with best practice to wisdom of crowds, from singular lies to collective “bs” and fake news.

World Economic Forum recently declared misinformation and digital wildfires some of the great challenges of our time:

“The global risk of massive digital misinformation sits at the centre of a constellation of technological and geopolitical risks ranging from terrorism to cyber attacks and the failure of global governance.”

How did we get to to this point riding on the back of the Enlightenment in which more information – or rather knowledge – was envisioned as a boon rather than a bane?

Indeed as British essayist, publisher, playwright, literary and social critic T.S. Eliot would have it:

“Where is all the knowledge we lost with information? “

Information in large quantity, volume and magnitude doesn’t in and by itself secure quality, reliability and veracity.

The information market does not seem to be an efficient market

We live in a time with information in abundance never seen before – by way of example on Social Media:

·         Every 60 seconds on Facebook: 510.000 comments are posted, 293.000 status updates, and 136.000 photos are uploaded. More than 5 billion pieces of content are shared daily.

·         Every second, on average, around 6.000 tweets are tweeted on Twitter which corresponds to over 350.000 tweets sent per minute, 500 million tweets per day and around 200 billion tweets per year.

·         300 hours of video are uploaded to YouTube every minute!  Almost 5 billion videos are watched on Youtube every single day.

But just because we have more information – we don’t necessarily become the wiser as American comedian Joey Novic once said:

”The information in the world doubles every day. What they don’t tell us is, is that our wisdom is cut in half at the same time” …

Already back in 1971, I was 1 year old at that time, Nobel Laureate Herbert Simon prophetically noted about the information age to come:

”…in an information-rich world, the wealth of information means a dearth of something else: a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients.”

Where is all the knowledge we lost with information?
T.S. Eliot

And here we have it between information and attention. Economics is much about the allocation of valuable resources; in the information age:

  1.   Attention is a very limited resource, there are only 24 hours in a day
  2.   Attention is the prime asset at the same time.



  1. doesn’t aggregate,
  2. you can’t save it for a rainy day and
  3.  it is a zero-sum game when you use it. Paying attention to one thing, you don’t pay attention to another and we don’t multitask very well as humans although we often claim otherwise.
  4.  does not follow a normal distribution – it is distributed online in accordance with power laws.


A few actors have by far the bulk of attention available and the rest must fight for whatever is left in the tail of the power distribution.

It’s like Thomas Piketty’s Capital – 1% of the world’s population own 50% of what we have, and 99% must fight for the remaining 50%.

95% online traffic is between Facebook, Google, Twitter, YouTube, Instagram and the rest must fight for what is left.

And the big gets bigger – Facebook buys Intagram, Google acquires Youtube ….

Information is how to get your hands on other’s attention – the result: Attention economics on the information market.

But a problem arises – the information market does  not seem to be an efficient market!

Former Chairman of the Federal Reserve of the United States, Alan Greenspan, was for a while during the early 2000’s a strong voice of support for what George Soros later labeled market fundamentalism:

Free and unregulated financial markets provide the best conditions for growth, wealth and will thus play vital roles in solving grand societal and economical challenges.

Along with the idea came the suggestion that every laissez faire market with self-interested and utility maximizing institutions and actors was efficient in the sense that incorrect pricing of products or services would self-correct given the liquidity of the market.

The self-regulating effect would eventually put the market in an equilibrium state in which only the financially sound and healthy products, companies and services would survive. Hence the free markets would in and by themselves provide the close to ideal conditions for growth and wealth without bubble formation and other financial nastiness.

In the wake of the financial crisis Alan Greenspan rather shockingly had to admit that deregulation and market fundamentalism couldn’t quite cash in the expectations:

“I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms”.

Some of the godawful “equity” around at that time, which in the end did not protect the financial sector, shareholders and banks but rather turned out to be a key player in the financial meltdown was the subprime business .

The subprime crisis will not be rehearsed here due to lack of time and should not up be up for even dress rehearsal ever again – period!

The unregulated information and news market in the digital age is similar in nature to the market fundamentalism ruling the financial markets of the 2000’s.

Assets are not immediately monetary assets or products. Now, the prime asset relentlessly pursued in the age of information is attention as Nobel Laureate Herbert Simon reminded us before.

By way of example: Think of the business model of social media:

(1)   Allocate people’s attention using information;

(2)   the consumption of information generates traffic;

(3)   traffic may be converted to money, power, influence, status or advertising possibilities.

As a user you don’t pay for your SoMe-profile. But if you don’t pay, you are the product, while the advertisers are the true customers. The social media and other purveyors of information sell the attention of the users to the advertisers who are the ones paying.

Hence you may speculate in what sort of information people are willing to consume. Thus, there is a market for information which, while not being necessarily true, allocates lots and lots of attention.

Now, what is viral is not necessarily true, and what is true is not necessarily viral.

Fake news is a poor information product as subprime loans were poor financial products.
Vincent Hendricks

So there is a market for fake news. At least three reasons may be given for entering this market:

(a)    for the fun of it/trolling;

(b)   propaganda / power struggles;

(c)    web traffic / money.

The issuing parties of fake news want to allocate people’s attention – they are working on commission for the advertisers.

The greater the allocation of attention, guaranteed by noisy and spectacular but not necessarily true news story, the more you may jack up the prices for advertising online for whatever the reason; for fun, political influence or cash money.

And there we have it: Happy Hour for fake news.

Fake news is a poor information product as subprime loans were poor financial products. But just like subprimes could survive for quite some time on deregulated financial markets …

… so can fake news live and prosper in terms of attention on a non-regulated information market. There is no ordinance in the course of being appraised to the effect that the information exchanged online has to be true.

The information market doesn’t necessarily find a natural equilibrium either in which only the correct information will strive and the fake will get weeded out as the efficient market hypothesis would like to have it.

And there we have it: Happy Hour for fake news.

Now what to do about it is exactly what we spend most of our time on at the Center for Information and Bubble Studies at The University of Copenhagen.

Thank you for your attention.