Rational Ignorance and Negative News in the Information Market
LICOS Discussion Paper No. 191/2007
12 Pages Posted: 17 Mar 2008
Date Written: October 2007
While the availability of information has increased rapidly, the public is still considered poorly informed. This paper contributes to the emerging field of media economics by studying how the demand side of the media market affects news production and consumption. We show that consumers are likely to remain imperfectly informed on most issues and that negative news coverage is likely to dominate positive news stories because of demand side effects.
Keywords: Media, bias, rational ignorance, negative news coverage
JEL Classification: L82, D83
Suggested Citation: Suggested Citation