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Competition for Attention and News Quality

Author

Listed:
  • Heng Chen
  • Wing Suen

Abstract

Over the past decades the number of news outlets has increased dramatically, but the quality of news products has declined. We propose a model to reconcile these facts where consumers' attention allocation decisions not only depend on but also affect news outlets' quality choices. When competition is intensified by new entries, the informativeness of the news industry rises. Thus, attention is diverted from existing outlets, reducing their incentives to improve news quality, which begets a downward spiral. Furthermore, when attention becomes cheaper, a larger number of news outlets can be accommodated in equilibrium, but news quality still falls.

Suggested Citation

  • Heng Chen & Wing Suen, 2023. "Competition for Attention and News Quality," American Economic Journal: Microeconomics, American Economic Association, vol. 15(3), pages 1-32, August.
    • Handle: RePEc:aea:aejmic:v:15:y:2023:i:3:p:1-32
    DOI: 10.1257/mic.20210259
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    More about this item

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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