References (63)


Citations (15)



Media Mergers and Media Bias with Rational Consumers

Simon P. Anderson

University of Virginia - Department of Economics

John McLaren

University of Virginia; NBER

March 2010

CEPR Discussion Paper No. DP7768

We present an economic model of media bias and media mergers. Media owners have political motives as well as profit motives, and can influence public opinion by withholding information that is pejorative to their political agenda - provided that their agenda is not too far from the political mainstream. This is true even with rational consumers who understand the media owners’ biases, because the public do not know how much information the news organizations have and so do not know when news is being withheld. In line with conventional wisdom, this problem can be undone by competition; but competition can be defeated in equilibrium by media mergers that enhance profits at the expense of the public interest. We thus derive a motive for media merger policy that is completely distinct from the motives behind conventional antitrust. While media bias may reduce the profit incentives to merge, media markets nonetheless err to being insufficiently competitive, and the consequences of merger are more severe than in other markets.

Number of Pages in PDF File: 73

Keywords: Information withholding, market for news, media bias, media mergers

JEL Classification: D23, L82

Date posted: April 5, 2010  

Suggested Citation

Anderson, Simon P. and McLaren, John, Media Mergers and Media Bias with Rational Consumers (March 2010). CEPR Discussion Paper No. DP7768. Available at SSRN: http://ssrn.com/abstract=1583266

Contact Information

Simon P. Anderson (Contact Author)
University of Virginia (UVA) - Department of Economics ( email )
P.O. Box 400182
Charlottesville, VA 22904-4182
United States
804-924-3861 (Phone)
804-982-2904 (Fax)
John McLaren
University of Virginia ( email )
P.O. Box 400182
Charlottesville, VA 22904-4182
United States
434-924-3994 (Phone)
434-982-2904 (Fax)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Feedback to SSRN

Paper statistics
Abstract Views: 947
Downloads: 6
References:  63
Citations:  15
People who downloaded this paper also downloaded:
1. Who Owns the Media?
By Simeon Djankov, Caralee Mcliesh, ...

© 2015 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo2 in 0.578 seconds