Mass Media: Constrained Information and Heterogenous PublicMaksymilian Kwiek Discussion Paper Series In Economics And Econometrics from University of Southampton, Economics Division, School of Social Sciences Abstract: This paper investigates how mass medium (sender) provides information to readers or viewers (receivers) who have diverse interests. The problem of the sender comes from the fact that there is a constraint on how much information can be delivered. It is shown that the sender can optimally provide information that is somewhat useful to all agents, but not perfect to anybody in particular. Because all receivers observe only one coarse signal delivered by the same mass medium their bahaviour is pefectly correlated, positively or negatively, even if the underlying states of nature are independent. In addition, if the correlation between states of nature of any two players is sufficiently high, their behaviour is positively correlated. However, we may have a situation where all agents are symmetric, the correlation of states of nature is negative (positive), but the behaviour is positively (negatively) correlated. The model can be used to explain the role of mass media in creating comovement among various industries during business cycle, or finacial contagion. Keywords; Mass media, news, cheap talk, quantization, comovement, herding, contagion. JEL Classification: L82, E32 New Economics Papers: this item is included in nep-cul Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: http://EconPapers.repec.org/RePEc:stn:sotoec:0606 Access Statistics for this paper More papers in Discussion Paper Series In Economics And Econometrics from University of Southampton, Economics Division, School of Social Sciences |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
Swedish Business School at Örebro University.