Media Plurality: Private versus Mixed Duopolies

Abstract

SNF SAMFUNNS-OG NAERINGSLIVSFORSKNING AS-er et selskap i NHH-miljøet med oppgave å initiere, organisere og utføre eksternfinansiert forskning. Norges Handelshøyskole og Stiftelsen SNF er aksjonaerer. Virksomheten drives med basis i egen stab og fagmiljøene ved NHH.SNF er ett av Norges ledende forsk ningsmiljø innen anvendt økonomisk-administrativ forskning, og har gode samarbeidsrelasjoner til andre forskningsmiljøer i Norge og utlandet. SNF utfører forskning og forsknings baserte utredninger for sentrale beslutningstakere i privat og offentlig sektor. Forskningen organiseres i programmer og prosjekter av langsiktig og mer kortsiktig karakter. Alle publikasjoner er offentlig tilgjengelig. SNF CENTRE FOR APPLIED RESEARCH AT NHH-is a company within the NHH group. Its objective is to initiate, organize and conduct externally financed research. The company shareholders are the Norwegian School of Economics (NHH) and the SNF Foundation. Research is carried out by SNF´s own staff as well as faculty members at NHH. SNF is one of Norway´s leading research environment within applied economic administrative research. It has excellent working relations with other research environments in Norway as well as abroad. SNF conducts research and prepares research-based reports for major decision-makers both in the private and the public sector. Research is organized in programmes and projects on a long-term as well as a short-term basis. All our publications are publicly available. Abstract WorkingIn this paper, we analyze the e¤ects on media plurality of competition between a private news …rm that maximizes pro…ts and a publicly owned news …rm that maximizes social welfare. We show that when the costs to adapt news to readers'political preferences are high relatively to the intensity of the readers'political preferences, pro…ts in the industry are lower, but prices, media plurality, consumer surplus, and social welfare are higher in the mixed duopoly than in the private duopoly case. The contrary is true when the costs to adapt news to readers' political preferences are low relatively to the intensity of the readers' political preferences. This result is con…rmed with the introduction of advertising and ine¢ ciencies of the public …rm.