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Media Capture in a Democracy: The Role of Wealth Concentration

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  • Giacomo Corneo

Abstract

Since objective news coverage is vital to democracy, captured media can seriously distort collective decisions. The current paper develops a voting model where citizens are uncertain about the welfare effects induced by alternative policy options and derive information about those effects from the mass media. The media might however secretly collude with interest groups in order to influence the public opinion. In the case of voting over the level of a productivity-enhancing public bad, it is shown that an increase in the concentration of firm ownership makes the occurrence of media bias more likely. Although media bias is not always welfare worsening, conditions for it to raise welfare are restrictive.

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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1402.

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Date of creation: 2005
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Handle: RePEc:ces:ceswps:_1402

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Keywords: mass media; public bads; voting; wealth inequality;

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References

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  1. Djankov, Simeon & et al, 2003. "Who Owns the Media?," Journal of Law and Economics, University of Chicago Press, vol. 46(2), pages 341-81, October.
  2. Benabou, R. & Laroque, G., 1992. "Using privileged information to manipulate markets: insiders, gurus, and credibility," Open Access publications from University College London http://discovery.ucl.ac.u, University College London.
  3. Roemer, J.E., 1991. "Would Economic Democracy Decrease the Amount of Public Bads?," Papers 376, California Davis - Institute of Governmental Affairs.
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  5. Sendhil Mullainathan & Andrei Shleifer, 2002. "Media Bias," Harvard Institute of Economic Research Working Papers 1981, Harvard - Institute of Economic Research.
  6. Timothy Besley & Andrea Prat, 2006. "Handcuffs for the Grabbing Hand? Media Capture and Government Accountability," American Economic Review, American Economic Association, vol. 96(3), pages 720-736, June.
  7. Harsanyi, John C., 1994. "Games with Incomplete Information," Nobel Prize in Economics documents 1994-1, Nobel Prize Committee.
  8. Chan, Jimmy & Suen, Wing, 2009. "Media as watchdogs: The role of news media in electoral competition," European Economic Review, Elsevier, vol. 53(7), pages 799-814, October.
  9. V. Crawford & J. Sobel, 2010. "Strategic Information Transmission," Levine's Working Paper Archive 544, David K. Levine.
  10. Sendhil Mullainathan & Andrei Shleifer, 2005. "The Market for News," American Economic Review, American Economic Association, vol. 95(4), pages 1031-1053, September.
  11. Baron, David P., 2004. "Persistent Media Bias," Research Papers 1845r, Stanford University, Graduate School of Business.
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Cited by:
  1. Prat, Andrea & Strömberg, David, 2011. "The Political Economy of Mass Media," CEPR Discussion Papers 8246, C.E.P.R. Discussion Papers.
  2. Bach, Stefan & Corneo, Giacomo & Steiner, Viktor, 2007. "From Bottom to Top: The Entire Distribution of Market Income in Germany, 1992-2001," CEPR Discussion Papers 6251, C.E.P.R. Discussion Papers.
  3. Georgy Egorov & Sergei Guriev & Konstantin Sonin, 2006. "Media Freedom, Bureaucratic Incentives, and the Resource Curse," Working Papers w0063, Center for Economic and Financial Research (CEFIR), revised Jun 2006.
  4. Bach, Stefan & Corneo, Giacomo & Steiner, Viktor, 2012. "Optimal top marginal tax rates under income splitting for couples," European Economic Review, Elsevier, vol. 56(6), pages 1055-1069.
  5. Maria Rosa Battaggion & Alessandro Vaglio, 2007. "The Demand for and the Supply of Pluralism: a Model of Media Market," Working Papers 0708, University of Bergamo, Department of Economics.
  6. Petrova, Maria, 2008. "Inequality and media capture," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 183-212, February.
  7. Ascensión Andina-Díaz, 2007. "Reinforcement vs. change: The political influence of the media," Public Choice, Springer, vol. 131(1), pages 65-81, April.
  8. Jiancai Pi, 2010. "Media Capture and Local Government Accountability," Prague Economic Papers, University of Economics, Prague, vol. 2010(3), pages 273-283.
  9. Rodrigo Taborda, 2011. "Media bias and central bank response. Evidence from the nominal exchange rate behavior in Colombia," DOCUMENTOS DE TRABAJO 009153, UNIVERSIDAD DEL ROSARIO.

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