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Does Conflict of Interest Lead to Biased Coverage? Evidence from Movie Reviews

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  • Stefano Dellavigna
  • Johannes Hermle

Abstract

Media outlets are increasingly owned by conglomerates, inducing a conflict of interest: a media outlet can bias its coverage to benefit companies in the same group. We test for bias by examining movie reviews in media outlets owned by News Corp, such as the Wall Street Journal, and Time Warner, such as Time. We find higher ratings for 20th Century Fox movies in News Corp. outlets compared to movies by other studios. To disentangle bias from correlation of taste, we introduce and validate a novel matching procedure using individual movie ratings from online platforms. Using this procedure, we find no evidence of bias in News Corp. nor Time Warner outlets. We reject even small effects, such as bias of one extra star (out of four) every thirteen movies. We test for differential bias when the return to bias is plausibly higher, examine bias by media outlet and by journalist, as well as editorial bias. We also consider bias by omission—whether media outlets are more likely to review highly-rated movies by affiliated studios—and conflict of interest within a movie aggregator. In none of these dimensions do we find evidence of bias. We relate to previous work and discuss three explanations for the lack of bias in our setting: high values of media reputation, organizational features in a conglomerate, and low returns to bias.

Suggested Citation

  • Stefano Dellavigna & Johannes Hermle, 2017. "Does Conflict of Interest Lead to Biased Coverage? Evidence from Movie Reviews," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 84(4), pages 1510-1550.
  • Handle: RePEc:oup:restud:v:84:y:2017:i:4:p:1510-1550.
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    File URL: http://hdl.handle.net/10.1093/restud/rdx002
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    Cited by:

    1. Luis Aguiar & Joel Waldfogel, 2018. "Platforms, Promotion, and Product Discovery: Evidence from Spotify Playlists," JRC Working Papers on Digital Economy 2018-04, Joint Research Centre.
    2. Tom Hamami & James Bailey, 2021. "Expert product reviews and conflict of interest," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(1), pages 170-176, January.
    3. Julia Cage, 2017. "Media Competition, Information Provision and Political Participation: Evidence from French Local Newspapers and Elections, 1944-2014," SciencePo Working papers hal-03393164, HAL.
    4. Graham Beattie & Ruben Durante & Brian Knight & Ananya Sen, 2021. "Advertising Spending and Media Bias: Evidence from News Coverage of Car Safety Recalls," Management Science, INFORMS, vol. 67(2), pages 698-719, February.
    5. Cagé, Julia, 2020. "Media competition, information provision and political participation: Evidence from French local newspapers and elections, 1944–2014," Journal of Public Economics, Elsevier, vol. 185(C).
    6. Cagé, Julia, 2017. "Media Competition, Information Provision and Political Participation: Evidence from French Local Newspapers and Elections, 1944," CEPR Discussion Papers 12198, C.E.P.R. Discussion Papers.
    7. Julia Cage, 2019. "Media competition, information provision and political participation:Evidence from French local newspapers and elections, 1944–2014," SciencePo Working papers Main hal-03567022, HAL.
    8. Asatryan, Zareh & Havlik, Annika & Heinemann, Friedrich & Nover, Justus, 2020. "Biases in fiscal multiplier estimates," European Journal of Political Economy, Elsevier, vol. 63(C).
    9. Julia Cage, 2017. "Media Competition, Information Provision and Political Participation: Evidence from French Local Newspapers and Elections, 1944-2014," SciencePo Working papers Main hal-03393164, HAL.
    10. Casarico, Alessandra & Tonin, Mirco, 2018. "Pay-What-You-Want to Support Independent Information: A Field Experiment on Motivation," IZA Discussion Papers 11366, Institute of Labor Economics (IZA).
    11. Heng Chen & Li Han, 2022. "Do the Media Bow to Foreign Economic Powers? Evidence from a News Website Crackdown," HKUST CEP Working Papers Series 202201, HKUST Center for Economic Policy.
    12. Emanuele Bajo & Marco Bigelli & Carlo Raimondo, 2020. "Ownership ties, conflict of interest, and the tone of news," European Financial Management, European Financial Management Association, vol. 26(3), pages 560-578, June.
    13. Vollaard, Ben & van Ours, Jan C., 2022. "Bias in expert product reviews," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 105-118.
    14. Raymond, Collin & Taylor, Sarah, 2021. "“Tell all the truth, but tell it slant”: Documenting media bias," Journal of Economic Behavior & Organization, Elsevier, vol. 184(C), pages 670-691.
    15. Walker, Clive B., 2024. "Going mainstream: Cryptocurrency narratives in newspapers," International Review of Financial Analysis, Elsevier, vol. 94(C).
    16. Vivek Bhattacharya & Gastón Illanes & Manisha Padi, 2019. "Fiduciary Duty and the Market for Financial Advice," NBER Working Papers 25861, National Bureau of Economic Research, Inc.
    17. Daniel M. Olson & David M. Waguespack, 2020. "Strategic behavior by market intermediaries," Strategic Management Journal, Wiley Blackwell, vol. 41(13), pages 2474-2492, December.
    18. Jordi McKenzie, 2023. "The economics of movies (revisited): A survey of recent literature," Journal of Economic Surveys, Wiley Blackwell, vol. 37(2), pages 480-525, April.
    19. Casarico, Alessandra & Tonin, Mirco, 2021. "A field experiment on fundraising to support independent information," Journal of Economic Behavior & Organization, Elsevier, vol. 186(C), pages 227-250.
    20. 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).
    21. Jacobsen, Grant D., 2015. "Consumers, experts, and online product evaluations: Evidence from the brewing industry," Journal of Public Economics, Elsevier, vol. 126(C), pages 114-123.
    22. Julia Cage, 2019. "Media competition, information provision and political participation:Evidence from French local newspapers and elections, 1944–2014," SciencePo Working papers hal-03567022, HAL.

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    More about this item

    Keywords

    Media Economics; Bias; Conflict of Interest; Conglomerates;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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