Why Echo Chambers are Useful

Why do people appear to forgo information by sorting into 'echo chambers'? We construct a highly tractable multi-sender, multi-receiver cheap talk game in which players choose with whom to communicate. We show that segregation into small, homogeneous groups can improve everybody's information and generate Paretoimprovements. Polarized preferences create a need for segregation; uncertainty about preferences and the availability of public information magnify this need. Using data from Twitter, we show several behavioral patterns that are consistent with the results of our model.