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Concentration and self-censorship in commercial media

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  • Germano, Fabrizio
  • Meier, Martin

Abstract

Given that over half the revenues of global newspaper publishing come from advertising (80% in the US and 57% in OECD countries, OECD, 2010), we study how media firms internalize the effect of their own coverage on advertisers' sales and hence on their own advertising revenues. We show, within a framework of non-localized, Hotelling-type competition among arbitrary numbers of media firms and outlets, that (i) topics sensitive to advertisers can be underreported by all outlets in the market, (ii) underreporting tends to increase with the concentration of ownership, and (iii) adding outlets, while keeping the number of owners fixed, can further increase the bias. We argue that self-censorship can potentially cover a wide range of topics and generate empirically large externalities.

Suggested Citation

  • Germano, Fabrizio & Meier, Martin, 2013. "Concentration and self-censorship in commercial media," Journal of Public Economics, Elsevier, vol. 97(C), pages 117-130.
  • Handle: RePEc:eee:pubeco:v:97:y:2013:i:c:p:117-130 DOI: 10.1016/j.jpubeco.2012.09.009
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    Cited by:

    1. Larbi Alaoui & Fabrizio Germano, 2012. "Time scarcity and the market for news," Economics Working Papers 1348, Department of Economics and Business, Universitat Pompeu Fabra, revised Sep 2014.
    2. Shapiro, Jesse M., 2016. "Special interests and the media: Theory and an application to climate change," Journal of Public Economics, Elsevier, pages 91-108.
    3. Andrea Mantovani & Claudio Piga & Carlo Reggiani, 2017. "The dynamics of online hotel prices and the EU Booking.com case," Working Papers 17-04, NET Institute.
    4. Yongmin Chen & Xinyu Hua, 2017. "Competition, Product Safety, and Product Liability," Journal of Law, Economics, and Organization, Oxford University Press, vol. 33(2), pages 237-267.
    5. Kerkhof, Anna & Münster, Johannes, 2015. "Quantity restrictions on advertising, commercial media bias, and welfare," Journal of Public Economics, Elsevier, pages 124-141.
    6. Blasco, Andrea & Sobbrio, Francesco, 2012. "Competition and commercial media bias," Telecommunications Policy, Elsevier, pages 434-447.
    7. Blasco, Andrea & Sobbrio, Francesco, 2012. "Competition and commercial media bias," Telecommunications Policy, Elsevier, pages 434-447.
    8. Blasco, Andrea & Pin, Paolo & Sobbrio, Francesco, 2016. "Paying positive to go negative: Advertisers׳ competition and media reports," European Economic Review, Elsevier, pages 243-261.
    9. Francesco Sobbrio, 2012. "A Citizen-Editors Model of News Media," RSCAS Working Papers 2012/61, European University Institute.
    10. Maria Battaggion & Alessandro Vaglio, 2015. "Watchdogs, Platforms and Audience: An Economic Perspective on Media Markets," Atlantic Economic Journal, Springer;International Atlantic Economic Society, pages 209-228.
    11. Rudiger, Jesper, 2013. "Cross-Checking the Media," MPRA Paper 51786, University Library of Munich, Germany.
    12. Fabrizio Germano, 2008. "On commercial media bias," Economics Working Papers 1133, Department of Economics and Business, Universitat Pompeu Fabra, revised Apr 2009.
    13. Yongmin Chen & Marius Schwartz, 2015. "Churn vs. Diversion: An Illustrative Model," Working Papers gueconwpa~15-15-07, Georgetown University, Department of Economics.
    14. 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.
    15. repec:hrv:faseco:33078973 is not listed on IDEAS

    More about this item

    Keywords

    Media economics; Media consolidation; Media markets; Advertising; Commercial media bias;

    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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