Competition and Ideological Diversity: Historical Evidence from US Newspapers

Matthew Gentzkow, Jesse M. Shapiro and Michael Sinkinson

No 18234, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study the competitive forces that shaped ideological diversity in the US press in the early twentieth century. We find that households preferred like-minded news and that newspapers used their political orientation to differentiate from competitors. We formulate a model of newspaper demand, entry, and political affiliation choice in which newspapers compete for both readers and advertisers. We use a combination of estimation and calibration to identify the model's parameters from novel data on newspaper circulation, costs, and revenues. The estimated model implies that competition enhances ideological diversity, that the market undersupplies diversity, and that optimal competition policy requires accounting for the two-sidedness of the news market.

JEL-codes: L11 L52 L82 (search for similar items in EconPapers)
Date: 2012-07
New Economics Papers: this item is included in nep-cul, nep-his, nep-hme, nep-ind and nep-pol
Note: DAE IO POL
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

Published as Matthew Gentzkow & Jesse M. Shapiro & Michael Sinkinson, 2014. "Competition and Ideological Diversity: Historical Evidence from US Newspapers," American Economic Review, American Economic Association, vol. 104(10), pages 3073-3114, October.

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Journal Article: Competition and Ideological Diversity: Historical Evidence from US Newspapers (2014)
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