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Herd Behaviour and Path Dependence in News Markets: Towards an Economic Theory of Scandal Formation

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  • Bartosz Wilczek

Abstract

Media phenomena coined as issue attention cycles, media hypes or scandals describe processes in which attention towards issues and news frames converges in news markets. But what drives these processes? This article explores a new theoretical framework, which draws on Economic Theory (i.e., Path Dependence Theory, Principal–Agent Theory, Herd Behaviour Theory and Behavioural Economic Theory), incorporates results from journalism and mass communication research and discusses a process in which journalists and their sources (i.e., whistleblowers, social media users and public relations experts) interact. Specifically, they engage in different types of herd behaviour related to the allocation of attention towards issues and news frames. These self-reinforcing mechanisms then lead to lock-ins—which under certain conditions can be un-locked. JEL: D03, D21, D80, Z00

Suggested Citation

  • Bartosz Wilczek, 2016. "Herd Behaviour and Path Dependence in News Markets: Towards an Economic Theory of Scandal Formation," Journal of Interdisciplinary Economics, , vol. 28(2), pages 137-167, July.
    • Handle: RePEc:sae:jinter:v:28:y:2016:i:2:p:137-167
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    Keywords

    Path Dependence Theory; Principal–Agent Theory; Herd Behaviour Theory; Behavioural Economic Theory; journalism; whistleblowing; social media; public relations; news markets; scandals;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • Z00 - Other Special Topics - - General - - - General

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