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Time scarcity and the market for news

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  • Alaoui, Larbi
  • Germano, Fabrizio

Abstract

We develop a theory of news coverage in environments of information abundance. Time-constrained consumers browse through news items across competing outlets. They choose which outlets to access and which stories to read or skip, thus indirectly deciding how much time to spend on a given outlet. Firms decide on rankings of news items that maximize their profits. We show that even when readers (or television viewers) and firms are rational and unbiased, they spend more time on the news than they would like and not necessarily on the topics they prefer. In particular, relevant news items may be crowded out. We then study how reader-efficient standards can be restored, and derive implications on diverse aspects of new and traditional media. These include tabloidization and polarization of the news, and other aspects relevant for the political economy of the media, including political knowledge gaps and voter turnout.

Suggested Citation

  • Alaoui, Larbi & Germano, Fabrizio, 2020. "Time scarcity and the market for news," Journal of Economic Behavior & Organization, Elsevier, vol. 174(C), pages 173-195.
  • Handle: RePEc:eee:jeborg:v:174:y:2020:i:c:p:173-195
    DOI: 10.1016/j.jebo.2020.04.009
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    Cited by:

    1. de Cornière, Alexandre & Sarvary, Miklos, 2020. "Social Media and the News: Content Bundling and news Quality," TSE Working Papers 20-1152, Toulouse School of Economics (TSE).
    2. Burguet, Roberto & Caminal, Ramon & Ellman, Matthew, 2015. "In Google we trust?," International Journal of Industrial Organization, Elsevier, vol. 39(C), pages 44-55.
    3. Kwiek, Maksymilian, 2020. "Communication via intermediaries," Games and Economic Behavior, Elsevier, vol. 121(C), pages 190-203.
    4. Le Moglie, Marco & Turati, Gilberto, 2019. "Electoral cycle bias in the media coverage of corruption news," Journal of Economic Behavior & Organization, Elsevier, vol. 163(C), pages 140-157.
    5. Germano, Fabrizio & Sobbrio, Francesco, 2020. "Opinion dynamics via search engines (and other algorithmic gatekeepers)," Journal of Public Economics, Elsevier, vol. 187(C).
    6. Francesco Sobbrio, 2014. "The political economy of news media: theory, evidence and open issues," Chapters, in: Francesco Forte & Ram Mudambi & Pietro Maria Navarra (ed.), A Handbook of Alternative Theories of Public Economics, chapter 13, pages 278-320, Edward Elgar Publishing.
    7. Alexandre de Corniere & Miklos Sarvary, 2017. "Social Media and the News Industry," Working Papers 17-07, NET Institute.
    8. Schroeder, Elizabeth & Stone, Daniel F., 2015. "Fox News and political knowledge," Journal of Public Economics, Elsevier, vol. 126(C), pages 52-63.

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    More about this item

    Keywords

    Media markets; Ranking news items; Time-constrained consumers; Digital media; Tabloidization of news; Political knowledge gaps;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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