IDEAS home Printed from https://ideas.repec.org/a/kap/ejlwec/v53y2022i1d10.1007_s10657-021-09714-5.html
   My bibliography  Save this article

Market power and journalistic quality

Author

Listed:
  • Martin Leroch

Abstract

The political news media play an important role in the successful working of democratic societies. In order to fulfill this role, a sufficient level of journalistic quality is required. Most Western societies rely on the market as means to assure this level of quality. This implies regulation of the media sector by competition law, which may take different attitudes towards market power. While it is undisputed that some aspects of competition between political news media firms yield beneficial social outcomes, empirical findings regarding the impact of changes in market power are less straightforward. In the present analysis, I aim to understand whether an increase in market power may lead to an increase in journalistic quality. To this end,I formally model a demand function for media outlets based on the empirically justified assumption that preferences for journalistic quality systematically differ among consumers according to their education. I refer to this finding as consumption capital in a wide sense. Using a model of monopolistic competition, I find that, if consumption capital is sufficiently high, an increase in market power is associated with an increase in journalistic quality.

Suggested Citation

  • Martin Leroch, 2022. "Market power and journalistic quality," European Journal of Law and Economics, Springer, vol. 53(1), pages 109-124, February.
    • Handle: RePEc:kap:ejlwec:v:53:y:2022:i:1:d:10.1007_s10657-021-09714-5
    DOI: 10.1007/s10657-021-09714-5
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10657-021-09714-5
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10657-021-09714-5?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Djankov, Simeon & McLiesh, Caralee & Nenova, Tatiana & Shleifer, Andrei, 2003. "Who Owns the Media?," Journal of Law and Economics, University of Chicago Press, vol. 46(2), pages 341-381, October.
    2. Dewenter, Ralf, 2003. "Rational Addiction to News?," Working Paper 2/2003, Helmut Schmidt University, Hamburg.
    3. Ying Fan, 2013. "Ownership Consolidation and Product Characteristics: A Study of the US Daily Newspaper Market," American Economic Review, American Economic Association, vol. 103(5), pages 1598-1628, August.
    4. Armando J. Garcia Pires, 2017. "Media pluralism and competition," European Journal of Law and Economics, Springer, vol. 43(2), pages 255-283, April.
    5. Anderson, Simon P. & Gabszewicz, Jean J., 2006. "The Media and Advertising: A Tale of Two-Sided Markets," Handbook of the Economics of Art and Culture, in: V.A. Ginsburgh & D. Throsby (ed.), Handbook of the Economics of Art and Culture, edition 1, volume 1, chapter 18, pages 567-614, Elsevier.
    6. Avner Shaked & John Sutton, 1982. "Relaxing Price Competition Through Product Differentiation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(1), pages 3-13.
    7. Timothy Besley & Andrea Prat, 2006. "Handcuffs for the Grabbing Hand? Media Capture and Government Accountability," American Economic Review, American Economic Association, vol. 96(3), pages 720-736, June.
    8. Sendhil Mullainathan & Andrei Shleifer, 2005. "The Market for News," American Economic Review, American Economic Association, vol. 95(4), pages 1031-1053, September.
    9. Adithya Pattabhiramaiah & S. Sriram & Shrihari Sridhar, 2018. "Rising Prices Under Declining Preferences: The Case of the U.S. Print Newspaper Industry," Marketing Science, INFORMS, vol. 37(1), pages 97-122, January.
    10. Matthew Gentzkow & Jesse M. Shapiro, 2008. "Competition and Truth in the Market for News," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 133-154, Spring.
    11. Nabamita Dutta & Sanjukta Roy, 2013. "The changing face of culture: gauging the impact of a free media," European Journal of Law and Economics, Springer, vol. 36(1), pages 95-115, August.
    12. George, Lisa, 2007. "What's fit to print: The effect of ownership concentration on product variety in daily newspaper markets," Information Economics and Policy, Elsevier, vol. 19(3-4), pages 285-303, October.
    13. Isabel-María García-Sánchez & Beatriz Cuadrado-Ballesteros & José-Valeriano Frías-Aceituno, 2016. "Does media freedom improve government effectiveness? A comparative cross-country analysis," European Journal of Law and Economics, Springer, vol. 42(3), pages 515-537, December.
    14. Leroch, Martin A. & Wellbrock, Christian M., 2011. "Saving newspapers with public grants – The effects of press subsidies on the provision of journalistic quality," Information Economics and Policy, Elsevier, vol. 23(3), pages 281-286.
    15. A. Michael Spence, 1975. "Monopoly, Quality, and Regulation," Bell Journal of Economics, The RAND Corporation, vol. 6(2), pages 417-429, Autumn.
    16. Stigler, George J & Becker, Gary S, 1977. "De Gustibus Non Est Disputandum," American Economic Review, American Economic Association, vol. 67(2), pages 76-90, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cagé, Julia, 2020. "Media competition, information provision and political participation: Evidence from French local newspapers and elections, 1944–2014," Journal of Public Economics, Elsevier, vol. 185(C).
    2. Cagé, Julia, 2017. "Media Competition, Information Provision and Political Participation: Evidence from French Local Newspapers and Elections, 1944," CEPR Discussion Papers 12198, C.E.P.R. Discussion Papers.
    3. Julia Cagé, 2014. "Media Competition, Information Provision and Political Participation," SciencePo Working papers Main hal-03602440, HAL.
    4. repec:spo:wpmain:info:hdl:2441/16juu6v6rg8rq8nl0u1grb4jm6 is not listed on IDEAS
    5. Garcia Pires, Armando J., 2014. "Media diversity, advertising, and adaptation of news to readers’ political preferences," Information Economics and Policy, Elsevier, vol. 28(C), pages 28-38.
    6. repec:hal:spmain:info:hdl:2441/16juu6v6rg8rq8nl0u1grb4jm6 is not listed on IDEAS
    7. Julia Cagé, 2014. "Media Competition, Information Provision and Political Participation," SciencePo Working papers hal-03602440, HAL.
    8. 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.
    9. Andina-Díaz, Ascensión & García-Martínez, José A., 2020. "Reputation and news suppression in the media industry," Games and Economic Behavior, Elsevier, vol. 123(C), pages 240-271.
    10. Julia Cage, 2017. "Media Competition, Information Provision and Political Participation: Evidence from French Local Newspapers and Elections, 1944-2014," SciencePo Working papers hal-03393164, HAL.
    11. Julia Cage, 2019. "Media competition, information provision and political participation:Evidence from French local newspapers and elections, 1944–2014," SciencePo Working papers hal-03567022, HAL.
    12. Marco Antonielli & Lapo Filistrucchi, 2011. "Collusion and the political differentiation of newspapers," Working Papers 11-26, NET Institute, revised Nov 2011.
    13. Ho, Benjamin & Liu, Peng, 2015. "Herd journalism: Investment in novelty and popularity in markets for news," Information Economics and Policy, Elsevier, vol. 31(C), pages 33-46.
    14. Gehlbach, Scott & Sonin, Konstantin, 2014. "Government control of the media," Journal of Public Economics, Elsevier, vol. 118(C), pages 163-171.
    15. Ascensión Andina Díaz, 2011. "Mass Media in Economics: Origins and Subsequent Contributions," Working Papers 2011-02, Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center.
    16. Martin A. Leroch, 2015. "Press Subsidies and Information in a Democratic Society," Working Papers 1508, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz.
    17. Rafael Di Tella & Ignacio Franceschelli, 2011. "Government Advertising and Media Coverage of Corruption Scandals," American Economic Journal: Applied Economics, American Economic Association, vol. 3(4), pages 119-151, October.
    18. Blasco, Andrea & Sobbrio, Francesco, 2012. "Competition and commercial media bias," Telecommunications Policy, Elsevier, vol. 36(5), pages 434-447.
    19. Julia Cage, 2017. "Media Competition, Information Provision and Political Participation: Evidence from French Local Newspapers and Elections, 1944-2014," SciencePo Working papers Main hal-03393164, HAL.
    20. Petrova, Maria, 2012. "Mass media and special interest groups," Journal of Economic Behavior & Organization, Elsevier, vol. 84(1), pages 17-38.
    21. Simon P. Anderson & Øystein Foros & Hans Jarle Kind, 2018. "Competition for Advertisers and for Viewers in Media Markets," Economic Journal, Royal Economic Society, vol. 128(608), pages 34-54, February.
    22. Julia Cage, 2019. "Media competition, information provision and political participation:Evidence from French local newspapers and elections, 1944–2014," SciencePo Working papers Main hal-03567022, HAL.

    More about this item

    Keywords

    Journalistic quality; Political news market; Monopolistic competition;
    All these keywords.

    JEL classification:

    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:ejlwec:v:53:y:2022:i:1:d:10.1007_s10657-021-09714-5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.