Media silence, feedback power and reputation

Ascension Andina-Diaz and José A. García-Martínez ()
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José A. García-Martínez: Department of Economic Theory, Universidad Miguel Hernández

No 2014-03, Working Papers from Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center

Abstract: This paper proposes a theory of media silence. The argument is that news organizations have the power to raise public concern and so affect the probability that there is ex-post verification of the true state of the world. Built on the literature of career concerns, we consider a newspaper that seeks to maximize its reputation for high quality. Our results predict more media silence, the higher the prior expectations on the quality of the firm, the greater the probability of ex-post verification, and the higher the power of the newspaper to activate the verification.

Keywords: Feedback power; reputation; quality; competition; media silence (search for similar items in EconPapers)
JEL-codes: C72 D82 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2014-12
New Economics Papers: this item is included in nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:mal:wpaper:2014-3

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