Cross-Checking the Media
MPRA Paper from University Library of Munich, Germany
A characteristic of the news market is that consumers often cross-check information, i.e. observe several news outlets. At the same time, data on political media suggest that more partisan consumers are more likely to cross-check. We explore these phenomena by building a model of horizontal competition in newspaper endorsements. Without cross-checking, outlets are unbiased and minimally differentiated. When cross-checking is allowed, we show that cross-checkers are indeed more partisan than those who only acquire one report. Furthermore, cross-checking induces outlets to differentiate, and the degree of differentiation is increasing in the dispersion of consumer beliefs. Differentiation is detrimental to consumer welfare, and a single monopoly outlet may provide higher consumer welfare than a competitive duopoly.
Keywords: News Markets; Media Bias; Cross-checking; Hotelling (search for similar items in EconPapers)
JEL-codes: D82 D83 L81 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-cul, nep-mic and nep-mkt
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:51786
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