IDEAS home Printed from https://ideas.repec.org/p/lvl/lacicr/0912.html
   My bibliography  Save this paper

Confirmatory News

Author

Listed:
  • Elena Panova

Abstract

This paper investigates how competition in the media affects the quality of news. In our model, demand for news depends on the market perception of the media's ability to receive correct information: it is positive if and only if news is potentially useful for the voting decision. When the media receives information which contradics commonly shared priors, it either reports this information or it confirms the priors: "most likely, my information is correct, but my potential buyers may be unable to assess the quality of news and attribute it according to common priors". We ask whether competition may help to elicit information from the media. Our answer is positive when news covers issues on which the priors are sufficiently precise, or the follow-up quality assessment is a likely event. However, when news concerns controversial issues and it is hardly possible to asses its quality, competitive pressures induce confirmatory reporting.

Suggested Citation

  • Elena Panova, 2009. "Confirmatory News," Cahiers de recherche 0912, CIRPEE.
    • Handle: RePEc:lvl:lacicr:0912
    as

    Download full text from publisher

    File URL: http://www.cirpee.org/fileadmin/documents/Cahiers_2009/CIRPEE09-12.pdf
    Download Restriction: no
    ---><---

    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. Ottaviani, Marco & Sorensen, Peter Norman, 2006. "The strategy of professional forecasting," Journal of Financial Economics, Elsevier, vol. 81(2), pages 441-466, August.
    3. Timothy Besley & Robin Burgess, 2002. "The Political Economy of Government Responsiveness: Theory and Evidence from India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1415-1451.
    4. David Hirshleifer, 1993. "Managerial Reputation and Corporate Investment Decisions," Financial Management, Financial Management Association, vol. 22(2), Summer.
    5. Baron, David P., 2004. "Persistent Media Bias," Research Papers 1845r, Stanford University, Graduate School of Business.
    6. Matthew Gentzkow & Jesse M. Shapiro, 2006. "Media Bias and Reputation," Journal of Political Economy, University of Chicago Press, vol. 114(2), pages 280-316, April.
    7. Matthew Ellman & Fabrizio Germano, "undated". "What Do the Papers Sell?," Working Papers 149, Barcelona School of Economics.
    8. Ambrus, Attila & Reisinger, Markus, 2006. "Exclusive vs Overlapping Viewers in Media Markets," Discussion Papers in Economics 1178, University of Munich, Department of Economics.
    9. Scharfstein, David S & Stein, Jeremy C, 1990. "Herd Behavior and Investment," American Economic Review, American Economic Association, vol. 80(3), pages 465-479, June.
    10. 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.
    11. Alan S. Gerber & Dean Karlan & Daniel Bergan, 2009. "Does the Media Matter? A Field Experiment Measuring the Effect of Newspapers on Voting Behavior and Political Opinions," American Economic Journal: Applied Economics, American Economic Association, vol. 1(2), pages 35-52, April.
    12. Sendhil Mullainathan & Andrei Shleifer, 2005. "The Market for News," American Economic Review, American Economic Association, vol. 95(4), pages 1031-1053, September.
    13. Ottaviani, Marco & Sorensen, Peter Norman, 2006. "Professional advice," Journal of Economic Theory, Elsevier, vol. 126(1), pages 120-142, January.
    14. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 797-817.
    15. Effinger, Matthias R. & Polborn, Mattias K., 2001. "Herding and anti-herding: A model of reputational differentiation," European Economic Review, Elsevier, vol. 45(3), pages 385-403, March.
    16. Tim Groseclose & Jeffrey Milyo, 2005. "A Measure of Media Bias," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(4), pages 1191-1237.
    17. John R. Graham, 1999. "Herding among Investment Newsletters: Theory and Evidence," Journal of Finance, American Finance Association, vol. 54(1), pages 237-268, February.
    18. Ambrus, Attila & Reisinger, Markus, 2006. "Exclusive vs Overlapping Viewers in Media Markets," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 161, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    19. Stromberg, David, 2001. "Mass media and public policy," European Economic Review, Elsevier, vol. 45(4-6), pages 652-663, May.
    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. Sendhil Mullainathan & Andrei Shleifer, 2005. "The Market for News," American Economic Review, American Economic Association, vol. 95(4), pages 1031-1053, September.
    2. 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.
    3. Sobbrio, Francesco, 2009. "Indirect Lobbying and Media Bias," MPRA Paper 18215, University Library of Munich, Germany.
    4. Ascensión Andina-Díaz, 2015. "Competition and uncertainty in a paper’s news desk," Journal of Economics, Springer, vol. 116(1), pages 77-93, September.
    5. Bizer, Kilian & Meub, Lukas & Proeger, Till & Spiwoks, Markus, 2014. "Strategic coordination in forecasting: An experimental study," University of Göttingen Working Papers in Economics 195, University of Goettingen, Department of Economics.
    6. 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.
    7. 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.
    8. 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.
    9. Petrova, Maria, 2011. "Newspapers and Parties: How Advertising Revenues Created an Independent Press," American Political Science Review, Cambridge University Press, vol. 105(4), pages 790-808, November.
    10. Petrova, Maria, 2012. "Mass media and special interest groups," Journal of Economic Behavior & Organization, Elsevier, vol. 84(1), pages 17-38.
    11. Strömberg, David & Prat, Andrea, 2011. "The Political Economy of Mass Media," CEPR Discussion Papers 8246, C.E.P.R. Discussion Papers.
    12. 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.
    13. David Strömberg, 2015. "Media and Politics," Annual Review of Economics, Annual Reviews, vol. 7(1), pages 173-205, August.
    14. Simon P. Anderson & John McLaren, 2012. "Media Mergers And Media Bias With Rational Consumers," Journal of the European Economic Association, European Economic Association, vol. 10(4), pages 831-859, August.
    15. Piolatto, Amedeo & Schuett, Florian, 2015. "Media competition and electoral politics," Journal of Public Economics, Elsevier, vol. 130(C), pages 80-93.
    16. Gehlbach, Scott & Sonin, Konstantin, 2014. "Government control of the media," Journal of Public Economics, Elsevier, vol. 118(C), pages 163-171.
    17. repec:lic:licosd:19107 is not listed on IDEAS
    18. Ruben Durante & Brian Knight, 2012. "Partisan Control, Media Bias, And Viewer Responses: Evidence From Berlusconi'S Italy," Journal of the European Economic Association, European Economic Association, vol. 10(3), pages 451-481, May.
    19. Friebel, Guido & Heinz, Matthias, 2014. "Media slant against foreign owners: Downsizing," Journal of Public Economics, Elsevier, vol. 120(C), pages 97-106.
    20. 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).
    21. Sobbrio, Francesco, 2014. "Citizen-editors' endogenous information acquisition and news accuracy," Journal of Public Economics, Elsevier, vol. 113(C), pages 43-53.

    More about this item

    Keywords

    Competition in the media; quality of news; common priors; reputational cheap-talk;
    All these keywords.

    JEL classification:

    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:lvl:lacicr:0912. 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: Manuel Paradis (email available below). General contact details of provider: https://edirc.repec.org/data/cirpeca.html .

    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.