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Media diversity, advertising, and adaptation of news to readers’ political preferences

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  • Garcia Pires, Armando J.

Abstract

In this paper, it is analyzed how advertising can affect media diversity when news firms can adapt news to readers’ political preferences. In particular, in the model news firms can choose between a single- and a multi-ideology strategy (a point on the Hotelling line and a line segment, respectively). It is shown that the size of the advertising market is determinant for the equilibrium of the news market. When the advertising market is small, news firms maximally differentiate their political offers and do not adapt news to readers’ political preferences (single-ideology strategy). When the advertising market is large, news firms minimally differentiate their political offers and do adapt news to readers’ political preferences (multi-ideology strategy).

Suggested Citation

  • Garcia Pires, Armando J., 2014. "Media diversity, advertising, and adaptation of news to readers’ political preferences," Information Economics and Policy, Elsevier, vol. 28(C), pages 28-38.
    • Handle: RePEc:eee:iepoli:v:28:y:2014:i:c:p:28-38
    DOI: 10.1016/j.infoecopol.2014.06.001
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    Cited by:

    1. Armando José Garcia Pires, 2023. "Ad-Valorem Taxes, Prices and Content Diversification in the News Market," Games, MDPI, vol. 14(2), pages 1-28, March.
    2. Jun Hu, 2021. "Regulation of media bias on online newspapers," Working Papers hal-03120466, HAL.
    3. Sendhil Mullainathan & Andrei Shleifer, 2005. "The Market for News," American Economic Review, American Economic Association, vol. 95(4), pages 1031-1053, September.
    4. 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.
    5. Torben Stühmeier, 2019. "Media market concentration and pluralism," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 28(2), pages 247-259, April.
    6. Armando J. Garcia Pires, 2017. "Media pluralism and competition," European Journal of Law and Economics, Springer, vol. 43(2), pages 255-283, April.
    7. 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.
    8. Kerkhof, Anna, 2019. "Advertising and Content Differentiation: Evidence from YouTube," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 204468, Verein für Socialpolitik / German Economic Association.
    9. Garcia Pires Armando J., 2020. "Content Provision in the Media Market with Single-Homing and Multi-Homing Consumers," Review of Network Economics, De Gruyter, vol. 19(1), pages 43-83, March.
    10. Armando J. Garcia Pires, 2021. "Net neutrality and content provision," Manchester School, University of Manchester, vol. 89(6), pages 569-593, December.

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    More about this item

    Keywords

    Media diversity; Advertising; Two-sided markets;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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