Understanding the Internet's relevance to media ownership policy: a model of too many choices
AbstractDoes 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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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 2180.
Date of creation: 14 Dec 2006
Date of revision:
Choice framing; Media ownership; Internet; Differentiated products; Location models;
Other versions of this item:
- Nagler Matthew G., 2007. "Understanding the Internet's Relevance to Media Ownership Policy: A Model of Too Many Choices," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(1), pages 1-28, June.
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-03-17 (All new papers)
- NEP-CUL-2007-03-17 (Cultural Economics)
- NEP-ICT-2007-03-17 (Information & Communication Technologies)
- NEP-MKT-2007-03-17 (Marketing)
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