 News Media Bargaining CodesLuca Sandrini and Robert Somogyi No 22-06, Working Papers from NET Institute Abstract: In this paper, we build a model of the news market where advertisers choose to allocate their ads between a social media platform and a news website that is the content creator. Our main objective is to evaluate a policy intervention that aims to foster news creation by transferring revenues from social media to news websites. Such interventions, commonly referred to as news media bargaining codes were first introduced in Australia in 2021 and are being implemented worldwide. We build on a novel trade-off between the higher advertising efficiency of social media and the value of content creation by news websites. When news quality is unaffected by the policy, we find that the equilibrium level of news creation may be socially sub-optimal. Moreover, we show that the policy intervention mandated by the bargaining code is always welfare-increasing. When news quality is endogenous, we nuance our results by showing that a poorly designed transfer can be inefficient. However, it still holds that the policy never harms consumers. Finally, we also provide some guidance on how to design the policy. Keywords: social media; news website; bargaining code; platform regulation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:net:wpaper:2206 Access Statistics for this paper More papers in Working Papers from NET Institute |
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