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Strategic Complementarities in a Model of Commercial Media Bias

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  • Anna Kerkhof
  • Johannes Münster

Abstract

Media content is an important privately supplied public good. While it has been shown that contributions to a public good crowd out other contributions in many cases, the issue has not been thoroughly studied for media markets yet. We show that in a standard model of commercial media bias, qualities of media content are strategic complements, whereby investments into quality crowd in further investments and engage competitors in a race to the top. Therefore, financially strong public service media can mitigate commercial media bias: the content of commercial media can be more in line with the preferences of the audience and less advertiser-friendly in a dual (mixed public and commercial) media system than in a purely commercial media market.

Suggested Citation

  • Anna Kerkhof & Johannes Münster, 2023. "Strategic Complementarities in a Model of Commercial Media Bias," CESifo Working Paper Series 10738, CESifo.
    • Handle: RePEc:ces:ceswps:_10738
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    References listed on IDEAS

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    More about this item

    Keywords

    commercial media bias; public service media; advertising two-sided markets; supermodular games; strategic complements; public goods;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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