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The Economics of Badmouthing: Libel Law and the Underworld of the Financial Press in France Before World War I

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  • Bignon, Vincent
  • Flandreau, Marc

Abstract

This article analyzes the economics of “badmouthing†in the context of the pre-1914 French capital market. We argue that badmouthing was a means through which racketeering journals sought to secure property rights over issuers' reputation. We provide a theoretical study of the market setup that emerged to deal with such problems, and we test our predictions using new evidence from contemporary sources.“A newspaper that wishes to make its fortune should never waste its columns and weary its readers by praising anything. Eulogy is invariably dull—a fact that Mr. Alf had discovered and utilized.†A. Trollope, The Way We Live Now, 1875“And did you threaten him with the newspapers?†H. de Balzac, La maison Nucingen, 1837

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  • Bignon, Vincent & Flandreau, Marc, 2011. "The Economics of Badmouthing: Libel Law and the Underworld of the Financial Press in France Before World War I," The Journal of Economic History, Cambridge University Press, vol. 71(3), pages 616-653, September.
    • Handle: RePEc:cup:jechis:v:71:y:2011:i:03:p:616-653_00
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    1. Bakker, Gerben, 2014. "How they made news pay: news traders’ quest for crisis-resistant business models," Economic History Working Papers 59304, London School of Economics and Political Science, Department of Economic History.
    2. Vincent Bignon & Marc Flandreau, 2012. "The Price of Media Capture and the Looting of Newspapers in Interwar France," IHEID Working Papers 09-2012, Economics Section, The Graduate Institute of International Studies.
    3. Louis-Sidois, Charles & Mougin, Elisa, 2023. "Silence the media or the story? Theory and evidence of media capture," European Economic Review, Elsevier, vol. 158(C).
    4. Marc Flandreau & Geoffroy Legentilhomme, 2022. "Cyberpunk Victoria: The credibility of computers and the first digital revolution, 1848–83," Economic History Review, Economic History Society, vol. 75(4), pages 1083-1119, November.
    5. Balmer, Roberto, 2013. "Entry and Competition in Local Newspaper Retail Markets - When two are enough," MPRA Paper 54079, University Library of Munich, Germany.
    6. Stephanie Collet & Kim Oosterlinck, 2019. "Denouncing Odious Debts," Journal of Business Ethics, Springer, vol. 160(1), pages 205-223, November.
    7. Bignon, Vincent & Flandreau, Marc, 2014. "The Price of Media Capture and the Debasement of the French Newspaper Industry During the Interwar," The Journal of Economic History, Cambridge University Press, vol. 74(3), pages 799-830, September.
    8. Oosterlinck, Kim & Collet, Stéphanie, 2016. "Pricing the Odious in Odious Debts," CEPR Discussion Papers 11653, C.E.P.R. Discussion Papers.

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