A Citizen-Editors Model of News Media

Sobbrio, Francesco (2011): A Citizen-Editors Model of News Media.

Abstract

This paper provides a model of the market for news where profit maximizing media outlets choose their editors from a population of rational citizens. The results show that, when information acquisition is costly, citizens find it optimal to acquire information from a media outlet with an editor with similar idiosyncratic preferences. At the same time, there is always an upper bound on the possible "extremism" of an editor above which the citizens' demand for news is strictly decreasing. Depending on the distribution of citizens' ideological preferences, a media outlet may choose to hire a non-moderate editor even in a monopolistic market. Moreover, the higher the degree of competition in the market for news, the more likely it is that media outlets will hire non-moderate editors. Finally, less moderate editors are more likely to be hired in a news market where the opportunity cost of acquiring information for citizens is low.

• Item Type: MPRA Paper
• Language: English
• Keywords: Media Bias; Information Acquisition; Valence; Competition
• Subjects: D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search ; Learning ; Information and Knowledge ; Communication ; Belief ; Unawareness

References

Anderson, S., P., and McLaren, J., (2010) "Media Mergers and Media Bias with Rational Consumers", CEPR Discussion Paper No. 7768.

Aragones E., and Palfrey T., R., (2002) "Mixed Equilibrium in a Downsian Model with a Favored Candidate", Journal of Economic Theory, 103: 131-161.

Baron, D., P., (2006) "Persistent Media Bias", Journal of Public Economics, 90(1): 1-36.

Besley, T., and Coate, S., (1997) "An Economic Model of Representative Democracy", The Quarterly Journal of Economics, 112(1): 85-114.

Besley T., and Prat A., (2006) "Handcuffs for the grabbing hand? Media capture and government accountability", American Economic Review, 96(3): 720-736.

Blasco, A., Pin, P., and Sobbrio, F. (2011) "Paying Positive to Go Negative: Advertisers' Competition and Media Reports", mimeo, IMT Lucca.

Brocas, I. and Carrillo J.D., (2007) "Influence through Ignorance", RAND Journal of Economics, 38(4): 931--947.

Brocas, I. and Carrillo J.D., (2009) "Information acquisition and choice under uncertainty", Journal of Economics and Management Strategy, 18(2): 423-455.

Calvert, R. L., (1985) "The Value of Information: A Rational Choice Model of Political Advice." Journal of Politics, 47: 530--55.

Chan, J., and Suen, W., (2008) "A Spatial Theory of News Consumption and Electoral Competition", The Review of Economic Studies, 75(3): 699-728.

Chiang, C., F., and Knight, B., G., (2010) "Media Bias and Influence: Evidence from Newspaper Endorsements", The Review of Economic Studies, forthcoming.

Cukierman, A., and Tommasi, M., (1998) "When Does it Take a Nixon to Go to China?", American Economic Review, 88(1): 180-197.

Dasgupta, P. and Maskin, E., (1986a) "The Existence of Equilibrium in Discontinuous Economic Games I: Theory", The Review of Economic Studies, 53(1): 1-26.

Dasgupta, P. and Maskin, E., (1986b) "The Existence of Equilibrium in Discontinuous Economic Games II: Applications", The Review of Economic Studies, 53(1): 27-41.

DellaVigna, S. and Gentzkow, G., (2010) "Persuasion: Empirical Evidence", Annual Review of Economics, 2: 643--69

DellaVigna, S. and Kaplan, E. (2007) "The Fox News Effect: Media Bias and Voting", The Quarterly Journal of Economics, 122(3): 1187-1234.

Djankov S., McLiesh C., Nenova T., and Shleifer A., (2003) "Who Owns The Media?", Journal of Law and Economics, 46: 341-382.

Durante R. and Knight B., (2010) "Partisan Control, Media Bias, and Viewer Responses: Evidence from Berlusconi's Italy", Journal of European Economic Association, forthcoming.

Ellman, M. and Germano, F., (2009) "What do the Papers Sell? A Model of Advertising and Media Bias", Economic Journal, 119: 680-704.

Gentzkow M., and Shapiro J., (2006), "Media Bias and Reputation", Journal of Political Economy, 114(2): 280-316.

Gentzkow M., and Shapiro J., (2010), "What Drives Media Slant? Evidence from U.S. Daily Newspapers", Econometrica, 78(1): 35-71

Gerber, A., Karlan, D., S. and Bergan, D. (2009) "Does the Media Matter? A Field Experiment Measuring the Effect of Newspapers on Voting Behavior and Political Opinions", American Economic Journal: Applied Economics, 1(2): 35-52.

Germano, F., and Meier, M., (2010) "Concentration and self-censorship in commercial media", Working Paper 1256, Universitat Pompeu Fabra

Groseclose, T. and Milyo, J., (2005). "A Measure of Media Bias," The Quarterly Journal of Economics, 120(4): 1191-1237.

Ho, D. E., and Quinn, K. M., (2008) "Measuring Explicit Political Positions of Media", Quarterly Journal of Political Science, 3: 353--377.

Kamenica, E., and Gentzkow, M., (2010) "Bayesian Persuasion", American Economic Review, forthcoming.

Li, H., and Suen, W., (2004) "Delegating Decisions to Experts", Journal of Political Economy, 112(1): 311-335.

Milgrom, P. and Roberts, J., (1986) "Relying on the Information of Interested Parties", RAND Journal of Economics, 17: 18-32.

Mullainathan and Shleifer, 2005 : Mullainathan S., and Shleifer A., (2005) "The Market for News", American Economic Review, 95(4): 1031-1053.

Osborne M., J., and Slivinsky A., (1996) "A Model of Political Competition with Citizen-Candidates", The Quarterly Journal of Economics, 111(1): 65-96.

Petrova, M., (2011) "Mass Media and Special Interest Groups", mimeo, New Economic School.

Prat, A. and Strömberg, D. (2011) "The Political Economy of Mass Media", mimeo, LSE and IIES.

Shiryaev, A., N. (2007) Optimal Stopping Rules, Springer, Berlin.

Sobbrio, F., (2010) "Lobbying the Voter: Special Interests and Media Influence on Direct Democracy", mimeo, IMT Lucca.

Strömberg, D. (2004) "Mass Media Competition, Political Competition, and Public Policy", The Review of Economic Studies, 71(1): 265--284.

Suen, W., (2004). "The Self-Perpetuation of Biased Beliefs", The Economic Journal, 114: 337-396