Media Bias and Reputation

Posted: 17 May 2006  

Matthew Gentzkow

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Jesse M. Shapiro

University of Chicago; National Bureau of Economic Research (NBER)

Multiple version iconThere are 3 versions of this paper

Abstract

A Bayesian consumer who is uncertain about the quality of an information source will infer that the source is of higher quality when its reports conform to the consumer's prior expectations. We use this fact to build a model of media bias in which firms slant their reports toward the prior beliefs of their customers in order to build a reputation for quality. Bias emerges in our model even though it can make all market participants worse off. The model predicts that bias will be less severe when consumers receive independent evidence on the true state of the world and that competition between independently owned news outlets can reduce bias. We present a variety of empirical evidence consistent with these predictions.

Suggested Citation

Gentzkow, Matthew and Shapiro, Jesse M., Media Bias and Reputation. Journal of Political Economy, Vol. 114, pp. 280-316, April 2006. Available at SSRN: https://ssrn.com/abstract=901840

Matthew Aaron Gentzkow

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Jesse M. Shapiro (Contact Author)

University of Chicago ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-834-2688 (Phone)
773-834-8172 (Fax)

HOME PAGE: http://home.uchicago.edu/~jmshapir/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Paper statistics

Abstract Views
589