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Competing for the Public Through the News Media


  • David P. Baron


Interest groups seek to influence economic activity through public and private politics. Public politics takes place in the arena of public institutions, whereas private politics takes place outside public institutions often in the arena of public sentiment. Private politics refers to action by interest groups directed at private parties, as in the case of an activist group launching a campaign against a firm. This paper presents a model of informational competition between an activist and an industry, where both interest groups seek to influence public sentiment and do so by advocating their positions through the news media. Citizen consumers make both a private consumption decision and a collective choice on the regulation of a product that has an externality associated with it. In the absence of the news organization, the collective choice is not to regulate. The activist and the industry obtain private, hard information on the seriousness of the externality and provide favorable information to the news media and may conceal unfavorable information. The news media can conduct investigative journalism to obtain its own information, and based on that information and the information it has received from its sources, provides a news report to the public. Because of its role in society, the media has an incentive to bias its report, and the direction of bias is toward regulation. Its bias serves to mitigate both market failure by decreasing demand and a government failure by shifting votes in favor of regulation. The activist then has incentive to conceal information unfavorable to its interests, whereas the industry fully reveals its information. Copyright Blackwell Publishing 2005.

Suggested Citation

  • David P. Baron, 2005. "Competing for the Public Through the News Media," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(2), pages 339-376, June.
  • Handle: RePEc:bla:jemstr:v:14:y:2005:i:2:p:339-376

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    Cited by:

    1. Alexander Dyck & David Moss & Luigi Zingales, 2013. "Media versus Special Interests," Journal of Law and Economics, University of Chicago Press, vol. 56(3), pages 521-553.
    2. David Detomasi, 2008. "The Political Roots of Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 82(4), pages 807-819, November.
    3. Armando J. Garcia-Pires & Hans Jarle Kind & Lars Sørgard, 2012. "News Sources and Media Bias," CESifo Working Paper Series 3906, CESifo Group Munich.
    4. repec:bla:stratm:v:37:y:2016:i:12:p:2425-2440 is not listed on IDEAS
    5. Aleix Calveras & Juan José Ganuza, 2015. "The role of public information in corporate social responsibility," Economics Working Papers 1491, Department of Economics and Business, Universitat Pompeu Fabra.
    6. Uhr, Daniel & Ziero Uhr, Júlia & Mueller, Bernardo, 2012. "Como as ONGs ambientais influenciam a política ambiental brasileira?," Revista Brasileira de Economia - RBE, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil), vol. 66(1), March.
    7. Y. Fassin, 2009. "Inconsistencies in Activists’ Behaviours and the Ethics of NGOs," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 09/576, Ghent University, Faculty of Economics and Business Administration.
    8. Zyglidopoulos, Stelios C. & Georgiadis, Andreas P. & Carroll, Craig E. & Siegel, Donald S., 2012. "Does media attention drive corporate social responsibility?," Journal of Business Research, Elsevier, vol. 65(11), pages 1622-1627.
    9. Glen Whelan & Jeremy Moon & Bettina Grant, 2013. "Corporations and Citizenship Arenas in the Age of Social Media," Journal of Business Ethics, Springer, vol. 118(4), pages 777-790, December.
    10. Jung, Hanjoon Michael, 2007. "Strategic Information Transmission through the Media," MPRA Paper 5556, University Library of Munich, Germany, revised Oct 2007.
    11. Thomas P. Lyon & John W. Maxwell, 2008. "Corporate Social Responsibility and the Environment: A Theoretical Perspective," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 2(2), pages 240-260, Summer.
    12. Yves Fassin, 2009. "Inconsistencies in Activists’ Behaviours and the Ethics of NGOs," Journal of Business Ethics, Springer, vol. 90(4), pages 503-521, December.
    13. Karen Moris, 2011. "La presse en tant que mécanisme de gouvernance disciplinaire," Revue Finance Contrôle Stratégie,, vol. 14(4), pages 21-66, December.
    14. Baron, David P., 2004. "Persistent Media Bias," Research Papers 1845r, Stanford University, Graduate School of Business.
    15. Aleix Calveras & Juan José Ganuza, 2014. "Building a reputation as a socially responsible firm," Economics Working Papers 1421, Department of Economics and Business, Universitat Pompeu Fabra.
    16. Christel Dumas & Céline Louche, 2016. "Collective beliefs for responsible investment," Post-Print hal-01183744, HAL.
    17. Couttenier, Mathieu & Hatte, Sophie, 2016. "Mass media effects on non-governmental organizations," Journal of Development Economics, Elsevier, vol. 123(C), pages 57-72.
    18. Karen Moris, 2010. "La presse en tant que mécanisme de gouvernance disciplinaire - Press as a disciplinary governance mechanism," Working Papers CREGO 1101003, Université de Bourgogne - CREGO EA7317 Centre de recherches en gestion des organisations.
    19. Sobbrio, Francesco, 2009. "Indirect Lobbying and Media Bias," MPRA Paper 18215, University Library of Munich, Germany.
    20. Francesco Sobbrio, 2014. "The political economy of news media: theory, evidence and open issues," Chapters,in: A Handbook of Alternative Theories of Public Economics, chapter 13, pages 278-320 Edward Elgar Publishing.
    21. repec:fgv:epgrbe:v:66:n:1:a:4 is not listed on IDEAS
    22. Richard A. Hunt & Lauren L. Ortiz-Hunt, 2017. "Deinstitutionalization through Business Model Evolution: Women Entrepreneurs in the Middle East and North Africa," Working Papers 2017-06, Colorado School of Mines, Division of Economics and Business.

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