Selective Reporting of Factual Content by Commercial Media
Journal of Marketing Research, Forthcoming
52 Pages Posted: 28 Jun 2014 Last revised: 13 Jul 2014
Date Written: June 25, 2014
We study the market for factual content and ask whether competition increases or decreases its provision. Factual content is supplied by commercial media who observe a set of facts depicting the true state of the world and selectively decide how to report them. Consumers value content that matches their opinion, which gives media an incentive to slant their reports by omitting certain facts. The novel feature in our model is that consumers anticipate media’s incentives for slant and all stances taken by media must be supported by facts. Furthermore, reports with more facts are more convincing. Despite consumers ability to detect slant and demand for factual support, our results show that competition results in consumers reading fewer facts and unable to update their priors about the state. We also find that a monopoly medium may be more polarizing than competitive media, and a polarized reporting can be less biased.
Keywords: Factual Content, Media Bias, Media Competition, Information Goods, Cheap-Talk
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