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News Media as Suppliers of Narratives (and Information)

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  • Eliaz, Kfir
  • Spiegler, Ran

Abstract

We present a model of news media that shape consumer beliefs by providing information (signals about an exogenous state) and narratives (models of what determines outcomes). To amplify consumers' engagement, media maximize consumers' anticipatory utility. Focusing on a class of separable consumer preferences, we show that a monopolistic media platform facing homogenous consumers provides a false "empowering" narrative coupled with an optimistically biased signal. Consumer heterogeneity gives rise to a novel menu-design problem due to a "data externality" among consumers. The optimal menu features multiple narratives and creates polarized beliefs. These effects also arise in a competitive media market model.

Suggested Citation

  • Eliaz, Kfir & Spiegler, Ran, 2024. "News Media as Suppliers of Narratives (and Information)," CEPR Discussion Papers 19081, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:19081
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    More about this item

    Keywords

    Media bias; Motivated beliefs; Narratives;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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