Online Quality with Endogenous Organization

66 Pages Posted: 25 Jun 2019

See all articles by Matthew Ellman

Matthew Ellman

Institut d'Anàlisi Econòmica (CSIC); Barcelona Graduate School of Economics (Barcelona GSE)

Tomás Rodríguez Barraquer

Universidad de los Andes

Date Written: December 2018

Abstract

This paper investigates how supply-side factors influence the search for quality content in online and offline environments. We show that lower fixed costs of online publishing reduce the incentives to bundle content, as compared to offline journal- ism. Given asymmetric information over journalistic quality, bundling of content by journalists who publish as a group generates positive informational externalities for users. Journalists tend to group assortatively with better journalists having better partners. A consumer who discovers one quality journalist has then found several. The online environment reduces the pressure to group up, leading to fragmentation of journalism outlets. This can lower welfare in our baseline model.

Keywords: media economics, quality, search, links, matching

JEL Classification: L13, L82

Suggested Citation

Ellman, Matthew and Rodríguez Barraquer, Tomás, Online Quality with Endogenous Organization (December 2018). Available at SSRN: https://ssrn.com/abstract=3407986 or http://dx.doi.org/10.2139/ssrn.3407986

Matthew Ellman

Institut d'Anàlisi Econòmica (CSIC) ( email )

UAB Campus
IAE-CSIC
E-08193 Bellaterra, Barcelona 08193
Spain
0034935806612 (Phone)

Barcelona Graduate School of Economics (Barcelona GSE) ( email )

Ramon Trias Fargas, 25-27
Barcelona, Barcelona 08005
Spain

Tomás Rodríguez Barraquer (Contact Author)

Universidad de los Andes ( email )

Carrera 1a No. 18A-10
Santafe de Bogota, AA4976
Colombia

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