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What Do Media Outlets Compete For?

Author

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  • Ascensión Andina

    (Universidad de Alicante)

Abstract

This paper studies broadcasting competition, considering not only television stations that maximize profits but stations that want to influence voters. Following two strands of the psychological literature, we argue that media exert influence on two different ways: (i) they can reinforce viewers in their prior opinions, (ii) they can modify viewers' attitudes. We consider agents who flip through the outlets according to pleasantness. In this context, we show that the aim of maximizing profits and the objective of political influence result in different equilibrium ideological locations. This is so since the economic aspect pushes television stations to locate closer and political considerations lead them to polarize their locations. We also show that both results do not depend on the way media exert influence, but they do on the fact that viewers do channel hopping. In particular, we observe that, due to channel hopping, the equilibrium outcome may not be represented by the median viewer location when stations maximize profits and a extreme polarization arises when outlets aim is to maximize political influence.

Suggested Citation

  • Ascensión Andina, 2003. "What Do Media Outlets Compete For?," Working Papers. Serie AD 2003-19, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    • Handle: RePEc:ivi:wpasad:2003-19
    as

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    File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-2003-19.pdf
    File Function: Fisrt version / Primera version, 2003
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    References listed on IDEAS

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    More about this item

    Keywords

    Television; channel hopping; audience;
    All these keywords.

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • L8 - Industrial Organization - - Industry Studies: Services

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