Understanding the Internet's relevance to media ownership policy: a model of too many choices

Nagler, Matthew (2006): Understanding the Internet's relevance to media ownership policy: a model of too many choices.

Abstract

Does the Internet provide a failsafe against media consolidation in the wake of an easing of media ownership rules? This paper posits a model of news outlet selection on the Internet in which consumers experience cognitive costs that increase with the number of options faced. Consistent with psychological evidence, these costs may be reduced by constraining one’s choice set to “safe bets” familiar from offline (e.g., CNN.com). It is shown that, as the number of outlets grows, dispersion of consumer visitation across outlets inevitably declines. Consequently, independent Internet outlets may fail to mitigate lost outlet independence on other media.

• Item Type: MPRA Paper
• Language: English
• Keywords: Choice framing; Media ownership; Internet; Differentiated products; Location models
• Subjects: L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L11 - Production, Pricing, and Market Structure ; Size Distribution of Firms; L - Industrial Organization > L8 - Industry Studies: Services > L86 - Information and Internet Services ; Computer Software; D - Microeconomics > D1 - Household Behavior and Family Economics > D11 - Consumer Economics: Theory

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