Strategic Complementarities in a Model of Commercial Media Bias

Anna Kerkhof and Johannes Münster ()
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Anna Kerkhof: Ifo Institute for Economic Research, and CESifo, University of Munich, 80539 Munich, Germany
Johannes Münster: Department of Economics, University of Cologne, 50923 Cologne, Germany

Games, 2025, vol. 16, issue 3, 1-46

Abstract: Media content is an important privately supplied public good. While it has been shown that contributions to a public good crowd out other contributions in many cases, the issue has not been thoroughly studied for media markets yet. We show that in a standard model of commercial media bias, qualities of media content are strategic complements, whereby investments into quality can crowd in further investments and engage competitors in a race to the top. Therefore, financially strong public service media can mitigate commercial media bias: the content of commercial media can be more in line with the preferences of the audience and less advertiser-friendly in a dual (mixed public and commercial) media system than in a purely commercial media market.

Keywords: commercial media bias; public service media; advertising; two-sided markets; supermodular games; strategic complements; public goods (search for similar items in EconPapers)
JEL-codes: C C7 C70 C71 C72 C73 (search for similar items in EconPapers)
Date: 2025
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