Agenda Chasing and Contests Among News Providers

36 Pages Posted: 3 Jul 2013

See all articles by Zsolt Katona

Zsolt Katona

University of California, Berkeley - Haas School of Business

Jonathan A. Knee

Columbia University - Columbia Business School; Evercore Partners Inc.

Miklos Sarvary

Columbia Business School - Marketing

Date Written: Jun 24, 2013

Abstract

We model competition among news providers as a contest where each firm chooses to publish on a topic from a large pool of topics with different prior success probabilities. If a topic is successful, firms that chose to publish on it share a fixed reward. We explore how increased competition (as measured by the number of firms and/or the share-structure of the reward) and the prior distribution of topics affect the diversity of published news. We relate our findings to current trends in news media, characterized by lower barriers to entry and the increased use of sophisticated technologies to identify successful topics from the large amount of, both professional and user-generated content available on the Internet. We show that the contest nature of competition tends to lead to a broader set of published media themes with a higher representation for marginal topics. The breadth of topics increases the more topics follow a "fat-tail'' prior distribution and the more a priori popular topics' success are correlated. It also increases with the number of competing firms but only if the share of the reward in the contest dissipates rapidly. We also explore the effect of asymmetry on competition. First, we assume that some firms have a 'brand', i.e. a capability to attract a loyal audience. We show that branded publishers are more likely to choose topics with high prior success probabilities, while unbranded publishers tend to choose a priori 'unlikely' topics. Second, we assume that some firms have better forecasting capability for the topics' success. Surprisingly, in this case, less informed firms choose topics in a conservative way (i.e. publish topics with the highest prior probabilities). When many firms reporting on the same topic increases the topic's rate of success, marginal topics may emerge but only if the contest is not too competitive and competing firms are neither too few nor too numerous. These findings are related to current trends in the news media industry.

Keywords: Agenda Setting, News Industry, Social Media

JEL Classification: C72, l82, M31, P16

Suggested Citation

Katona, Zsolt and Knee, Jonathan A. and Sarvary, Miklos, Agenda Chasing and Contests Among News Providers (Jun 24, 2013). Columbia Business School Research Paper No. 13-49. Available at SSRN: https://ssrn.com/abstract=2288672 or http://dx.doi.org/10.2139/ssrn.2288672

Zsolt Katona (Contact Author)

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

Jonathan A. Knee

Columbia University - Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

Evercore Partners Inc. ( email )

55 E. 52nd St.,
New York, NY 10055
United States

Miklos Sarvary

Columbia Business School - Marketing ( email )

New York, NY 10027
United States

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