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Understanding the Internet's relevance to media ownership policy: a model of too many choices

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Author Info
Nagler, Matthew

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Abstract

Does the Internet provide a failsafe against media consolidation in the wake of an easing of media ownership rules? This paper posits a model of news outlet selection on the Internet in which consumers experience cognitive costs that increase with the number of options faced. Consistent with psychological evidence, these costs may be reduced by constraining one’s choice set to “safe bets” familiar from offline (e.g., CNN.com). It is shown that, as the number of outlets grows, dispersion of consumer visitation across outlets inevitably declines. Consequently, independent Internet outlets may fail to mitigate lost outlet independence on other media.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 2180.

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Date of creation: 14 Dec 2006
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Handle: RePEc:pra:mprapa:2180

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Related research
Keywords: Choice framing Media ownership Internet Differentiated products Location models

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Find related papers by JEL classification:
L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

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