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WHAT DO MEDIA OUTLETS COMPETE FOR?

Ascension Andina-Diaz

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: This paper studies broadcasting competition, considering not only television stations that maximize profits but stations that want to influence voters. Following two strands of the psychological literature, we argue that media exert influence on two different ways: (i) they can reinforce viewers in their prior opinions, (ii) they can modify viewers' attitudes. We consider agents who flip through the outlets according to pleasantness. In this context, we show that the aim of maximizing profits and the objective of political influence result in different equilibrium ideological locations. This is so since the economic aspect pushes television stations to locate closer and political considerations lead them to polarize their locations. We also show that both results do not depend on the way media exert influence, but they do on the fact that viewers do channel hopping. In particular, we observe that, due to channel hopping, the equilibrium outcome may not be represented by the median viewer location when stations maximize profits and a extreme polarization arises when outlets aim is to maximize political influence.

Keywords: Television; channel hopping; audience (search for similar items in EconPapers)
JEL-codes: D2 H3 L8 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2003-06
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Published by Ivie

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http://www.ivie.es/downloads/docs/wpasad/wpasad-2003-19.pdf Fisrt version / Primera version, 2003 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:2003-19

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