Abstract
We study the diffusion of a true and a false message (misinformation) when agents are biased and able to verify messages. As a recipient of a false message who verifies it becomes informed of the truth, a higher prevalence of misinformation can increase the prevalence of the truth. We uncover conditions such that this happens and discuss policy implications. Specifically, a planner aiming to maximize the prevalence of the truth should allow misinformation to circulate if: non-verified messages may be ignored, transmission of information is relatively low, and the planner's budget to induce verification is neither too low nor too high. Homophily increases the spread of misinformation, but also facilitates diffusion of truth, and leads to similar results on the effect of verification.