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News Consumption and Media Bias

Author

Listed:
  • Yi Xiang

    (The Hong Kong University of Science and Technology, Clear Water Bay, Kowloon, Hong Kong)

  • Miklos Sarvary

    (INSEAD, 77305 Fontainebleau, France)

Abstract

Bias in the market for news is well-documented. Recent research in economics explains the phenomenon by assuming that consumers want to read (watch) news that is consistent with their tastes or prior beliefs rather than the truth. The present paper builds on this idea but recognizes that (i) besides “biased” consumers, there are also “conscientious” consumers whose sole interest is in discovering the truth, and (ii) consistent with reality, media bias is constrained by the truth. These two factors were expected to limit media bias in a competitive setting. Our results reveal the opposite. We find that media bias may increase when there are more conscientious consumers. However, this increased media bias does not necessarily hurt conscientious consumers who may be able to recover more information from multiple media outlets the more the outlets are biased. We discuss the practical implications of these findings for media positioning, media pricing, media planning, and the targeting of advertising.

Suggested Citation

  • Yi Xiang & Miklos Sarvary, 2007. "News Consumption and Media Bias," Marketing Science, INFORMS, vol. 26(5), pages 611-628, 09-10.
    • Handle: RePEc:inm:ormksc:v:26:y:2007:i:5:p:611-628
    DOI: 10.1287/mksc.1070.0279
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    References listed on IDEAS

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    4. Budzinski, Oliver, 2022. "Lobbyismus und Medienwirtschaft - Strategische Beeinflussung von Informationsflüssen," Ilmenau Economics Discussion Papers 162, Ilmenau University of Technology, Institute of Economics.
    5. Sendhil Mullainathan & Andrei Shleifer, 2005. "The Market for News," American Economic Review, American Economic Association, vol. 95(4), pages 1031-1053, September.
    6. Pinar Yildirim & Esther Gal-Or & Tansev Geylani, 2013. "User-Generated Content and Bias in News Media," Management Science, INFORMS, vol. 59(12), pages 2655-2666, December.
    7. Emeric Henry, 2009. "Disclosure of research results: the cost of proving your honesty," Sciences Po publications info:hdl:2441/eu4vqp9ompq, Sciences Po.
    8. Oliver Budzinski, 2008. "Europäische Medienmärkte: Die Rolle der Wettbewerbspolitik," MAGKS Papers on Economics 200806, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    9. Chutian Wang & Bo Zhou & Yogesh V. Joshi, 2024. "Endogenous Consumption and Metered Paywalls," Marketing Science, INFORMS, vol. 43(1), pages 158-177, January.
    10. Simonov, Andrey & Rao, Justin, 2017. "Demand for (Un)Biased News: The Role of Government Control in Online News Markets," Working Papers 261, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    11. Maria Petrova & Ananya Sen & Pinar Yildirim, 2021. "Social Media and Political Contributions: The Impact of New Technology on Political Competition," Management Science, INFORMS, vol. 67(5), pages 2997-3021, May.
    12. Khim-Yong Goh & Kai-Lung Hui & Ivan P. L. Png, 2011. "Newspaper Reports and Consumer Choice: Evidence from the Do Not Call Registry," Management Science, INFORMS, vol. 57(9), pages 1640-1654, February.
    13. Emeric Henry, 2009. "Strategic Disclosure of Research Results: The Cost of Proving Your Honesty," Economic Journal, Royal Economic Society, vol. 119(539), pages 1036-1064, July.
    14. Monic Sun & Feng Zhu, 2011. "Ad Revenue and Content Commercialization: Evidence from Blogs," Working Papers 11-32, NET Institute.
    15. Leonardo Madio, 2023. "Content Moderation and Advertising in Social Media Platforms," "Marco Fanno" Working Papers 0297, Dipartimento di Scienze Economiche "Marco Fanno".
    16. Maria Petrova & Ananya Sen & Pinar Yildirim, 2020. "Social Media and Political Contributions: The Impact of New Technology on Political Competition," Papers 2011.02924, arXiv.org.
    17. Monic Sun & Feng Zhu, 2013. "Ad Revenue and Content Commercialization: Evidence from Blogs," Management Science, INFORMS, vol. 59(10), pages 2314-2331, October.
    18. Behringer, Stefan & Filistrucchi, Lapo, 2015. "Hotelling competition and political differentiation with more than two newspapers," Information Economics and Policy, Elsevier, vol. 30(C), pages 36-49.
    19. Andrey Simonov & Szymon Sacher & Jean-Pierre Dubé & Shirsho Biswas, 2022. "Frontiers: The Persuasive Effect of Fox News: Noncompliance with Social Distancing During the COVID-19 Pandemic," Marketing Science, INFORMS, vol. 41(2), pages 230-242, March.
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    22. Yi Xiang & David Soberman, 2014. "Consumer Favorites and the Design of News," Management Science, INFORMS, vol. 60(1), pages 188-205, January.
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