How they made news pay: news traders’ quest for crisis-resistant business models

Gerben Bakker

Economic History Working Papers from London School of Economics and Political Science, Department of Economic History

Abstract: This paper discusses the problem, implied by Arrow’s fundamental paradox of information, of how to make money from news. To earn money from important news, news traders need to tell the potential buyer what it is, yet once they have revealed it, the buyer no longer needs to pay. This paper discusses how historically this paradox made it difficult for news agencies to profit from selling important news during crises, and how they gradually developed new business models in response. It examines these models and investigates how they interacted with market structure, resulting in just a few international news agencies dominating the international news supply.

Keywords: news agencies - history; Reuters; Havas; the Associated Press; Wolff-Continental; ANP; Arrow’s fundamental paradox of information; business models; sunk costs; market structure - history; quasi-public goods/toll goods; financial crises; Kenneth J. Arrow (search for similar items in EconPapers)
JEL-codes: L1 L15 L82 L86 L87 L96 N70 N80 Z10 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2014-08
New Economics Papers: this item is included in nep-hpe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:wpaper:59304

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