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Time Scarcity and the Market for News

Larbi Alaoui () and Fabrizio Germano ()

No 675, Working Papers from Barcelona Graduate School of Economics

Abstract: We develop a theory of news coverage in environments of information abundance. News consumers are time-constrained and browse through news items that are available across competing outlets, choosing which ones to read or skip. Media firms are aware of consumers' preferences and constraints, and decide on rankings of news items that maximize their profits. We find that, even when readers and outlets are rational and unbiased and when markets are competitive, readers may read more than they would like to, and the stories they read may be significantly different from the ones they prefer. Next, we derive implications on diverse aspects of new and traditional media. These include a rationale for tabloid news, a theory of optimal advertisement placement in newscasts, and a justification for readers' migration to online media platforms in order to circumvent inefficient rankings found in traditional media. We then analyze methods for restoring reader-efficient standards and discuss the political economy implications of the theory.

Keywords: media competition; news ranking; political economy; scarcity of time (search for similar items in EconPapers)
JEL-codes: D03 L13 L82 (search for similar items in EconPapers)
Date: 2014-09
New Economics Papers: this item is included in nep-cul, nep-ict and nep-mic
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Related works:
Journal Article: Time scarcity and the market for news (2020) Downloads
Working Paper: Time scarcity and the market for news (2019) Downloads
Working Paper: Time Scarcity and the Market for News (2015) Downloads
Working Paper: Time Scarcity and the Market for News (2015) Downloads
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