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News media bargaining codes

Author

Listed:
  • Sandrini, Luca
  • Somogyi, Robert

Abstract

We build a model of the news market where advertisers allocate their ads between a social media platform and a news website. Our objective is to evaluate policy interventions aimed at fostering news creation by transferring revenues from social media to news websites already introduced in Australia, Canada, and Indonesia). We show that social media may voluntarily contribute to news development, but only suboptimally. Beyond a certain level of state-mandated transfer, the social media platform can credibly threaten to remove news content. We provide some guidance on how to design a policy that improves welfare by promoting news creation.

Suggested Citation

  • Sandrini, Luca & Somogyi, Robert, 2024. "News media bargaining codes," ZEW Discussion Papers 24-043, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:300268
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    References listed on IDEAS

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    1. Luca Sandrini & Robert Somogyi, 2022. "News Media Bargaining Codes," Working Papers 22-06, NET Institute.

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    More about this item

    Keywords

    social media; news quality; platform regulation; news media bargaining code; online advertising;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • 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
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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