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The Market for News

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Author Info

  • Sendhil Mullainathan
  • Andrei Shleifer

Abstract

We investigate the market for news under two assumptions: that readers hold beliefs which they like to see confirmed, and that newspapers can slant stories toward these beliefs. We show that, on the topics where readers share common beliefs, one should not expect accuracy even from competitive media: competition results in lower prices, but common slanting toward reader biases. On topics where reader beliefs diverge (such as politically divisive issues), however, newspapers segment the market and slant toward extreme positions. Yet in the aggregate, a reader with access to all news sources could get an unbiased perspective. Generally speaking, reader heterogeneity is more important for accuracy in media than competition per se.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/0002828054825619
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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 95 (2005)
Issue (Month): 4 (September)
Pages: 1031-1053

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Handle: RePEc:aea:aecrev:v:95:y:2005:i:4:p:1031-1053

Note: DOI: 10.1257/0002828054825619
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References

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  1. Stealing Wheelbarrows
    by Liam Delaney in Geary Behaviour Centre on 2010-09-18 16:24:00
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