Munich Personal RePEc Archive

Cross-Checking the Media

Rudiger, Jesper (2013): Cross-Checking the Media.

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Abstract

A characteristic of the news market is that consumers often cross-check information, i.e. observe several news outlets. At the same time, data on political media suggest that more partisan consumers are more likely to cross-check. We explore these phenomena by building a model of horizontal competition in newspaper endorsements. Without cross-checking, outlets are unbiased and minimally differentiated. When cross-checking is allowed, we show that cross-checkers are indeed more partisan than those who only acquire one report. Furthermore, cross-checking induces outlets to differentiate, and the degree of differentiation is increasing in the dispersion of consumer beliefs. Differentiation is detrimental to consumer welfare, and a single monopoly outlet may provide higher consumer welfare than a competitive duopoly.

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