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The market for scoops: a dynamic approach

Author

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  • Ascensión Andina-Díaz

    (Universidad de Málaga)

  • José A. García-Martínez

    (Universidad Miguel Hernández)

  • Antonio Parravano

    (Universidad de Los Andes)

Abstract

We present a dynamic model of competition in the media industry in which behavioral media outlets compete for the publication of scoops, and both the publication of scoops and their veracity determine an outlet’s future audience. We study the dynamics of the audiences of outlets and how those dynamics relate to two issues: how harsh a society is with the publication of false stories, and how similar media outlets are in their editorial standards for quality. For the case of a duopoly, we show that there is only one stable stationary state. In that equilibrium, the two outlets coexist and which one leads the market (the low-standard outlet or the high-standard outlet) depends on a combination of the two issues mentioned above. We then use numerical simulations to analyze the general case with more than two outlets. The numerical results corroborate most of the analytical insights gained for the duopoly case. We also use numerical simulations to draw up predictions on the number of outlets that will survive in the industry in the long run.

Suggested Citation

  • Ascensión Andina-Díaz & José A. García-Martínez & Antonio Parravano, 2019. "The market for scoops: a dynamic approach," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 10(2), pages 175-206, June.
    • Handle: RePEc:spr:series:v:10:y:2019:i:2:d:10.1007_s13209-019-0191-y
    DOI: 10.1007/s13209-019-0191-y
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    More about this item

    Keywords

    Media industry; Competition; Editorial standard; Stochastic dynamics; Deterministic dynamics;
    All these keywords.

    JEL classification:

    • D25 - Microeconomics - - Production and Organizations - - - Intertemporal Firm Choice: Investment, Capacity, and Financing
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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