IDEAS home Printed from https://ideas.repec.org/p/ipt/decwpa/2018-02.html
   My bibliography  Save this paper

The digital transformation of news media and the rise of disinformation and fake news

Author

Abstract

This report contains an overview of the relevant economic research literature on the digital transformation of news markets and the impact on the quality of news. It compares various definitions of fake news, including false news and other types of disinformation and finds that there is no consensus on this. It presents some survey data on consumer trust and quality perceptions of various sources of online news that indicate relatively high trust in legacy printed and broadcasted news publishers and lower trust in algorithm-driven news distribution channels such as aggregators and social media. Still, two thirds of consumers access news via these channels. More analytical empirical evidence on the online consumption of genuine and fake news shows that strong newspaper brands continue to attract large audiences from across the political spectrum for direct access to newspaper websites. Real news consumption on these sites dwarfs fake news consumption. Fake news travels faster and further on social media sites. Algorithm-driven news distribution platforms have reduced market entry costs and widened the market reach for news publishers and readers. At the same time, they separate the role of content editors and curators of news distribution. The latter becomes algorithm-driven, often with a view to maximize traffic and advertising revenue. That weakens the role of trusted editors as quality intermediaries and facilitates the distribution of false and fake news content. It might lead to news market failures. News distribution platforms have recently become aware of the need to correct for these potential failures. Non-regulatory initiatives such as fact-checking, enhanced media literacy and news media codes of conduct can also contribute.

Suggested Citation

  • Bertin Martens & Luis Aguiar & Estrella Gomez Herrera & Frank Muller, 2018. "The digital transformation of news media and the rise of disinformation and fake news," JRC Working Papers on Digital Economy 2018-02, Joint Research Centre.
    • Handle: RePEc:ipt:decwpa:2018-02
    as

    Download full text from publisher

    File URL: https://publications.jrc.ec.europa.eu/repository/handle/JRC111529
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. José L. Moraga-González & Vaiva Petrikaitė, 2013. "Search costs, demand-side economies, and the incentives to merge under Bertrand competition," RAND Journal of Economics, RAND Corporation, vol. 44(3), pages 391-424, September.
    2. Barrera, Oscar & Guriev, Sergei & Henry, Emeric & Zhuravskaya, Ekaterina, 2020. "Facts, alternative facts, and fact checking in times of post-truth politics," Journal of Public Economics, Elsevier, vol. 182(C).
    3. repec:hal:wpspec:info:hdl:2441/1dhd1b1s319fbai85khk40fudc is not listed on IDEAS
    4. Caillaud, Bernard & Jullien, Bruno, 2003. "Chicken & Egg: Competition among Intermediation Service Providers," RAND Journal of Economics, The RAND Corporation, vol. 34(2), pages 309-328, Summer.
    5. Marc Rysman, 2009. "The Economics of Two-Sided Markets," Journal of Economic Perspectives, American Economic Association, vol. 23(3), pages 125-143, Summer.
    6. Hunt Allcott & Matthew Gentzkow, 2017. "Social Media and Fake News in the 2016 Election," NBER Working Papers 23089, National Bureau of Economic Research, Inc.
    7. Ruben Enikolopov & Maria Petrova & Ekaterina Zhuravskaya, 2011. "Media and Political Persuasion: Evidence from Russia," American Economic Review, American Economic Association, vol. 101(7), pages 3253-3285, December.
    8. Dirk Bergemann & Alessandro Bonatti, 2015. "Selling Cookies," American Economic Journal: Microeconomics, American Economic Association, vol. 7(3), pages 259-294, August.
    9. Alan S. Gerber & Dean Karlan & Daniel Bergan, 2009. "Does the Media Matter? A Field Experiment Measuring the Effect of Newspapers on Voting Behavior and Political Opinions," American Economic Journal: Applied Economics, American Economic Association, vol. 1(2), pages 35-52, April.
    10. Peitz, Martin & Valletti, Tommaso M., 2008. "Content and advertising in the media: Pay-tv versus free-to-air," International Journal of Industrial Organization, Elsevier, vol. 26(4), pages 949-965, July.
    11. Christoph Aymanns & Jakob Foerster & Co-Pierre Georg, 2017. "Fake News in Social Networks," Papers 1708.06233, arXiv.org.
    12. Jean-Charles Rochet & Jean Tirole, 2003. "Platform Competition in Two-Sided Markets," Journal of the European Economic Association, MIT Press, vol. 1(4), pages 990-1029, June.
    13. Matthew Gentzkow, 2007. "Valuing New Goods in a Model with Complementarity: Online Newspapers," American Economic Review, American Economic Association, vol. 97(3), pages 713-744, June.
    14. Alexandre de Corniere & Miklos Sarvary, 2017. "Social Media and the News Industry," Working Papers 17-07, NET Institute.
    15. Sendhil Mullainathan & Andrei Shleifer, 2005. "The Market for News," American Economic Review, American Economic Association, vol. 95(4), pages 1031-1053, September.
    16. Chiou, Lesley & Tucker, Catherine, 2013. "Paywalls and the demand for news," Information Economics and Policy, Elsevier, vol. 25(2), pages 61-69.
    17. Bertin Martens, 2016. "An Economic Policy Perspective on Online Platforms," JRC Working Papers on Digital Economy 2016-05, Joint Research Centre.
    18. Julia Cagé & Nicolas Hervé & Marie-Luce Viaud, 2020. "The Production of Information in an Online World," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 87(5), pages 2126-2164.
    19. Joan Calzada & Ricard Gil, 2020. "What Do News Aggregators Do? Evidence from Google News in Spain and Germany," Marketing Science, INFORMS, vol. 39(1), pages 134-167, January.
    20. George, Lisa, 2007. "What's fit to print: The effect of ownership concentration on product variety in daily newspaper markets," Information Economics and Policy, Elsevier, vol. 19(3-4), pages 285-303, October.
    21. Stefano DellaVigna & Ethan Kaplan, 2007. "The Fox News Effect: Media Bias and Voting," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(3), pages 1187-1234.
    22. Matthew Gentzkow & Jesse M. Shapiro, 2010. "What Drives Media Slant? Evidence From U.S. Daily Newspapers," Econometrica, Econometric Society, vol. 78(1), pages 35-71, January.
    23. Simon P. Anderson & Bruno Jullien, 2015. "The advertising-financed business model in two-sided media markets," Post-Print hal-02866192, HAL.
    24. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    25. Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, vol. 71(5), pages 845-858, December.
    26. Jean‐Charles Rochet & Jean Tirole, 2006. "Two‐sided markets: a progress report," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 645-667, September.
    27. Rosse, James N, 1970. "Estimating Cost Function Parameters without Using Cost Data: Illustrated Methodology," Econometrica, Econometric Society, vol. 38(2), pages 256-275, March.
    28. Jan Tempel & Aliya Noormohamed & Robert Schwartz & Cameron Norman & Muhannad Malas & Laurie Zawertailo, 2016. "Vape, quit, tweet? Electronic cigarettes and smoking cessation on Twitter," International Journal of Public Health, Springer;Swiss School of Public Health (SSPH+), vol. 61(2), pages 249-256, March.
    29. Ying Fan, 2013. "Ownership Consolidation and Product Characteristics: A Study of the US Daily Newspaper Market," American Economic Review, American Economic Association, vol. 103(5), pages 1598-1628, August.
    30. Lesley Chiou & Catherine Tucker, 2017. "Content aggregation by platforms: The case of the news media," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(4), pages 782-805, December.
    31. Prat, Andrea & Kennedy, Patrick, 2017. "Where Do People Get Their News?," CEPR Discussion Papers 12426, C.E.P.R. Discussion Papers.
    32. Matthew Gentzkow & Jesse M. Shapiro & Daniel F. Stone, 2014. "Media Bias in the Marketplace: Theory," NBER Working Papers 19880, National Bureau of Economic Research, Inc.
    33. Geoffrey G. Parker & Marshall W. Van Alstyne, 2005. "Two-Sided Network Effects: A Theory of Information Product Design," Management Science, INFORMS, vol. 51(10), pages 1494-1504, October.
    34. repec:hal:spmain:info:hdl:2441/1dhd1b1s319fbai85khk40fudc is not listed on IDEAS
    35. Michael L. Katz & Carl Shapiro, 1994. "Systems Competition and Network Effects," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 93-115, Spring.
    36. Levi Boxell & Matthew Gentzkow & Jesse M. Shapiro, 2017. "Is the Internet Causing Political Polarization? Evidence from Demographics," NBER Working Papers 23258, National Bureau of Economic Research, Inc.
    37. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 797-817.
    38. Lisa M. George & Joel Waldfogel, 2006. "The New York Times and the Market for Local Newspapers," American Economic Review, American Economic Association, vol. 96(1), pages 435-447, March.
    39. Acemoglu, Daron & Ozdaglar, Asuman & ParandehGheibi, Ali, 2010. "Spread of (mis)information in social networks," Games and Economic Behavior, Elsevier, vol. 70(2), pages 194-227, November.
    40. Christoph Aymanns & Jakob Foerster & Co-Pierre Georg, 2017. "Fake News in Social Networks," Working Papers on Finance 1804, University of St. Gallen, School of Finance.
    41. Hunt Allcott & Matthew Gentzkow, 2017. "Social Media and Fake News in the 2016 Election," Journal of Economic Perspectives, American Economic Association, vol. 31(2), pages 211-236, Spring.
    42. Sendhil Mullainathan & Andrei Shleifer, 2005. "The Market for News," American Economic Review, American Economic Association, vol. 95(4), pages 1031-1053, September.
    43. Kaiser, Ulrich & Song, Minjae, 2009. "Do media consumers really dislike advertising? An empirical assessment of the role of advertising in print media markets," International Journal of Industrial Organization, Elsevier, vol. 27(2), pages 292-301, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Raluca Buturoiu & Georgiana Udrea & Denisa-Adriana Oprea & Nicoleta Corbu, 2021. "Who Believes in Conspiracy Theories about the COVID-19 Pandemic in Romania? An Analysis of Conspiracy Theories Believers’ Profiles," Societies, MDPI, vol. 11(4), pages 1-16, November.
    2. van Gils, Freek & Müller, Wieland & Prüfer, Jens, 2020. "Big Data and Democracy," Discussion Paper 2020-003, Tilburg University, Tilburg Law and Economic Center.
    3. Aida María de Vicente Domínguez & Ana Beriain Bañares & Javier Sierra Sánchez, 2021. "Young Spanish Adults and Disinformation: Do They Identify and Spread Fake News and Are They Literate in It?," Publications, MDPI, vol. 9(1), pages 1-16, January.
    4. Petratos, Pythagoras N., 2021. "Misinformation, disinformation, and fake news: Cyber risks to business," Business Horizons, Elsevier, vol. 64(6), pages 763-774.
    5. Domenico, Giandomenico Di & Sit, Jason & Ishizaka, Alessio & Nunan, Daniel, 2021. "Fake news, social media and marketing: A systematic review," Journal of Business Research, Elsevier, vol. 124(C), pages 329-341.
    6. Bisceglia, Michele, 2023. "The unbundling of journalism," European Economic Review, Elsevier, vol. 158(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Behringer, Stefan & Filistrucchi, Lapo, 2015. "Hotelling competition and political differentiation with more than two newspapers," Information Economics and Policy, Elsevier, vol. 30(C), pages 36-49.
    2. Jullien, Bruno & Pavan, Alessandro & Rysman, Marc, 2021. "Two-sided Markets, Pricing, and Network Effects," TSE Working Papers 21-1238, Toulouse School of Economics (TSE).
    3. Marco Antonielli & Lapo Filistrucchi, 2011. "Collusion and the political differentiation of newspapers," Working Papers 11-26, NET Institute, revised Nov 2011.
    4. 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.
    5. repec:hal:spmain:info:hdl:2441/7jk88md0ar9hga662p2vjjq4kc is not listed on IDEAS
    6. 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).
    7. Charles Angelucci & Julia Cage & Michael Sinkinson, 2020. "Media Competition and News Diets," SciencePo Working papers Main hal-03393063, HAL.
    8. 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.
    9. repec:hal:spmain:info:hdl:2441/478a1feno18otpdr60lclo4fuq is not listed on IDEAS
    10. Charles Angelucci & Julia Cagé, 2019. "Newspapers in Times of Low Advertising Revenues," American Economic Journal: Microeconomics, American Economic Association, vol. 11(3), pages 319-364, August.
    11. Charles Angelucci & Julia Cage & Michael Sinkinson, 2020. "Media Competition and News Diets," Working Papers hal-03393063, HAL.
    12. repec:hal:spmain:info:hdl:2441/4edekc99or8n2bu86nu4ua8adl is not listed on IDEAS
    13. repec:hal:spmain:info:hdl:2441/26t617gatp86qree1dejcpchbr is not listed on IDEAS
    14. Maria Battaggion & Alessandro Vaglio, 2015. "Watchdogs, Platforms and Audience: An Economic Perspective on Media Markets," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 43(2), pages 209-228, June.
    15. Charles Angelucci & Julia Cage & Michael Sinkinson, 2020. "Media Competition and News Diets," SciencePo Working papers hal-03393063, HAL.
    16. repec:hal:spmain:info:hdl:2441/4ec86lkes59hv9tfv77ld1p5fr is not listed on IDEAS
    17. 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.
    18. Robert Seamans & Feng Zhu, 2014. "Responses to Entry in Multi-Sided Markets: The Impact of Craigslist on Local Newspapers," Management Science, INFORMS, vol. 60(2), pages 476-493, February.
    19. Jetter, Michael, 2017. "Terrorism and the Media: The Effect of US Television Coverage on Al-Qaeda Attacks," IZA Discussion Papers 10708, Institute of Labor Economics (IZA).
    20. Matthew Gentzkow & Jesse M. Shapiro & Michael Sinkinson, 2014. "Competition and Ideological Diversity: Historical Evidence from US Newspapers," American Economic Review, American Economic Association, vol. 104(10), pages 3073-3114, October.
    21. Doh-Shin Jeon & Nikrooz Nasr, 2016. "News Aggregators and Competition among Newspapers on the Internet," American Economic Journal: Microeconomics, American Economic Association, vol. 8(4), pages 91-114, November.
    22. Julia Cage & Nicolas Hervé & Marie-Luce Viaud, 2017. "The Production of Information in an Online World: Is Copy Right?," Working Papers hal-03393171, HAL.
    23. Germano, Fabrizio & Sobbrio, Francesco, 2020. "Opinion dynamics via search engines (and other algorithmic gatekeepers)," Journal of Public Economics, Elsevier, vol. 187(C).
    24. Felix Chopra & Ingar K. Haaland & Christopher Roth, 2019. "Do People Value More Informative News?," CESifo Working Paper Series 8026, CESifo.
    25. Filistrucchi, L. & Gerardin, D. & van Damme, E.E.C. & Keunen, S. & Klein, T.J. & Michielsen, T.O. & Wileur, J., 2010. "Mergers in Two-Sided Markets - A Report to the NMa," Other publications TiSEM f901d1fe-8878-444e-a685-8, Tilburg University, School of Economics and Management.

    More about this item

    Keywords

    fake news; disinformation; media industries; online news; multi-sided markets; news aggregators; social media;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ipt:decwpa:2018-02. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Publication Officer (email available below). General contact details of provider: https://edirc.repec.org/data/ipjrces.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.