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Media silence, feedback power and reputation

Author

Listed:
  • Ascensión Andina-Díaz

    (Department of Economic Theory, Universidad de Málaga)

  • José A. García-Martínez

    (Department of Economic Theory, Universidad Miguel Hernández)

Abstract

This paper proposes a theory of media silence. The argument is that news organizations have the power to raise public concern and so affect the probability that there is ex-post verification of the true state of the world. Built on the literature of career concerns, we consider a newspaper that seeks to maximize its reputation for high quality. Our results predict more media silence, the higher the prior expectations on the quality of the firm, the greater the probability of ex-post verification, and the higher the power of the newspaper to activate the verification.

Suggested Citation

  • Ascensión Andina-Díaz & José A. García-Martínez, 2014. "Media silence, feedback power and reputation," Working Papers 2014-03, Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center.
    • Handle: RePEc:mal:wpaper:2014-3
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    References listed on IDEAS

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    More about this item

    Keywords

    Feedback power; reputation; quality; competition; media silence;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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