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What do the papers sell?;
What do the papers sell? A model of advertising and media bias
Ellman, Matthew; Germano, Fabrizio
Universitat Pompeu Fabra. Departament d'Economia i Empresa
We model the market for news as a two-sided market where newspapers sell news to readers who value accuracy and sell space to advertisers who value advert-receptive readers. We show that monopolistic newspapers under-report or bias news that sufficiently reduces advertiser profits. Newspaper competition generally reduces the impact of advertising. In fact, as the size of advertising grows, newspapers may paradoxically reduce advertiser bias, due to increasing competition for readers. However, advertisers can counter this effect of competition by committing to news-sensitive cut-off strategies, potentially inducing as much under-reporting as in the monopoly case.
Management and Organization Studies
two-sided markets
media accuracy
media bias
media economics.
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