Media Bias in the Marketplace: Theory

Gentzkow, Matthew; Shapiro, Jesse M.; Stone, Daniel

doi:10.3386/w19880

Cited by 86 publications

(101 citation statements)

References 46 publications

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“…Profit The media firm maximizes the advertising revenue, which is assumed to proportionate to the traffic to the firm's news site (Gentzkow, Shapiro and Stone, 2015). The traffic is equivalent to the measure of readers.…”

Section: The Baseline Modelmentioning

confidence: 99%

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Homophily in Social Media and News Polarization

Abreu

Jeon

2019

SSRN Journal

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We study how media bias is affected by the structure of social networks on social media. We consider an ad-financed media firm which chooses the ideological location of its news and targets consumers who can share the news with their followers on an online social media. After studying how a targeted consumer's incentive to share the news is shaped by the network structure of her followers, we study the firm's strategy to maximize the breadth of news sharing and find that when the mean (respectively, the variance) of followers' ideological locations is a convex (respectively, concave) function of a direct consumer's location, the media firm is likely to produce polarized news. The analysis of the case in which consumers are uniformly distributed reveals that news polarization is more likely to occur as the degree of homophily increases. We also find that media competition makes polarization more likely.

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Section: The Baseline Modelmentioning

confidence: 99%

“…Our work relates to the literature on demand-driven media bias (Gentzkow, Shapiro and Stone, 2015), which means that consumers enjoy reading news that confirm their biased beliefs. Mullainathan and Shleifer (2005) and Gabszewicz, Laussel and Sonnac (2001) use a Hotelling kind of model to explain a possible ideological bias of news.…”

Section: Introductionmentioning

confidence: 99%

Homophily in Social Media and News Polarization

Abreu

Jeon

2019

SSRN Journal

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“…Allcott and Gentzkow (2017) provide a recent overview of much of the directly related economics literature. They consider the economics of fake news very directly and summarise a model of Gentzkow, Shapiro and Stone (Gentzkow et al, 2016) in which, in contrast to Mullainathan and Shleifer (2005), fake news can be characterised as being uncorrelated with the truth. 'Fake news arises in equilibrium because it is cheaper to 4 Barrera Rodriguez et al (2017) conducted a randomised online experiment with potential French voters during the 2017 presidential election campaign, exposing subjects to quotes from Marine Le Pen, a right-wing candidate, and/or real facts and found that those intending to vote for her were unswayed by correct information.…”

Section: Introductionmentioning

confidence: 99%

Media, fake news, and debunking

Long¹,

Richardson

Stähler

2019

Economic Record

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We construct a modified Hotelling‐type model of two media providers, each of whom can issue fake and/or real news and each of whom can invest in the debunking of their rival’s fake news. The model assumes that consumers have an innate preference for one provider or the other and value real news. However, that valuation varies according to their bias favouring one provider or the other. We demonstrate a unique subgame perfect Nash equilibrium in which only one firm issues fake news and we show, in this setting, that increased polarisation of consumers (represented by a wider distribution) increases the prevalence of both fake news and debunking expenditures and is welfare‐reducing. We also show, inter alia, that a stronger preference by consumers for their preferred provider lowers both fake news and debunking. Finally, we compare monopoly and duopoly market structures in terms of ‘fake news’ provision and show that a public news provider can be welfare‐improving.

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“…The literature has moved from assessing the evidence of bias (Groseclose and Milyo, 2005), to estimating the electoral impact of media conglomerates' bias (DellaVigna and Kaplan, 2007;Gentzkow et al, 2011), to discussing the sources of bias in either reputational incentives and other supply sources (Gentzkow and Shapiro, 2006) or in cognitive limitations of readers and viewers and other demand sources (Duggan and Martinelli, 2011;Mullainathan and Shleifer, 2005) or in both supply and demand factors (Bernhardt et al, 2008), to discussing the importance of media for the control of incumbent politicians (Besley and Prat, 2006). The literature is summarized from different perspectives by Prat and Stromberg (2013) and Gentzkow and Shapiro (2015).…”

Section: Introductionmentioning

confidence: 99%

Political Economics of Broadcast Media

Castañeda

Martinelli

2015

SSRN Journal

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We offer a tractable model of broadcast media as a three-sided platform, serving entertainment and news to viewers, commercial opportunities to advertisers, and electoral influence to politicians. We characterize the profitmaximization decision of a media firm, and study the effect on social welfare of changes in the value of electoral influence, via induced changes in commercial advertising, the entertainment value of media, and political distortions.

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Media Bias in the Marketplace: Theory

Abstract: We review the theoretical literature on market determinants of media bias. We present a theoretical framework that organizes many key themes in the literature, and discuss substantive lessons.

Cited by 86 publications

References 46 publications

Homophily in Social Media and News Polarization

Homophily in Social Media and News Polarization

Media, fake news, and debunking

Political Economics of Broadcast Media

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