Media Versus Special Interests

Dyck, I. J. Alexander; Moss, David A.; Zingales, Luigi

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Media Versus Special Interests

NBER Working Paper No. w14360

48 Pages Posted: 23 Sep 2008 Last revised: 28 Sep 2022

See all articles by I. J. Alexander Dyck

I. J. Alexander Dyck

University of Toronto - Rotman School of Management

David A. Moss

Harvard Business School - Business, Government and the International Economy Unit

Luigi Zingales

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

There are 3 versions of this paper

Date Written: September 2008

Abstract

We argue that profit-maximizing media help overcome the problem of "rational ignorance" highlighted by Downs (1957) and in so doing make elected representatives more sensitive to the interests of general voters. By collecting news and combining it with entertainment, media are able to inform passive voters on politically relevant issues. To show the impact this information has on legislative outcomes, we document the effect "muckraking" magazines had on the voting patterns of U.S. representatives and senators in the early part of the 20th century. We also show under what conditions profit-maximizing media will cater to general (less affluent) voters in their coverage, providing a counterbalance to special interests.

Suggested Citation: Suggested Citation

Dyck, I.J. Alexander and Moss, David A. and Zingales, Luigi, Media Versus Special Interests (September 2008). NBER Working Paper No. w14360, Available at SSRN: https://ssrn.com/abstract=1271392