Media Capture in a Democracy: The Role of Wealth Concentration

42 Pages Posted: 16 Feb 2005

See all articles by Giacomo Corneo

Giacomo Corneo

Free University of Berlin (FUB); Universität Osnabrück - Faculty of Business Administration - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Centre for Economic Policy Research (CEPR); Institute for the Study of Labor (IZA)

Date Written: February 2005

Abstract

Since objective news coverage is vital to democracy, captured media can seriously distort collective decisions. The current paper develops a voting model where citizens are uncertain about the welfare effects induced by alternative policy options and derive information about those effects from the mass media. The media might however secretly collude with interest groups in order to influence the public opinion. In the case of voting over the level of a productivity-enhancing public bad, it is shown that an increase in the concentration of firm ownership makes the occurrence of media bias more likely. Although media bias is not always welfare worsening, conditions for it to raise welfare are restrictive.

Keywords: mass media, public bads, voting, wealth inequality

JEL Classification: H41, D72

Suggested Citation

Corneo, Giacomo, Media Capture in a Democracy: The Role of Wealth Concentration (February 2005). CESifo Working Paper Series No. 1402. Available at SSRN: https://ssrn.com/abstract=667326

Giacomo Corneo (Contact Author)

Free University of Berlin (FUB) ( email )

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D-10785 Berlin, Berlin 14195
Germany

Universität Osnabrück - Faculty of Business Administration - Department of Economics ( email )

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Osnabrueck, D-49069
Germany
+49 541 969 2730 (Phone)
+49 541 969 2722 (Fax)

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

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Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

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