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News Consumption and Media Bias

Author

Listed:
  • Yi Xiang

    () (The Hong Kong University of Science and Technology, Clear Water Bay, Kowloon, Hong Kong)

  • Miklos Sarvary

    () (INSEAD, 77305 Fontainebleau, France)

Abstract

Bias in the market for news is well-documented. Recent research in economics explains the phenomenon by assuming that consumers want to read (watch) news that is consistent with their tastes or prior beliefs rather than the truth. The present paper builds on this idea but recognizes that (i) besides “biased” consumers, there are also “conscientious” consumers whose sole interest is in discovering the truth, and (ii) consistent with reality, media bias is constrained by the truth. These two factors were expected to limit media bias in a competitive setting. Our results reveal the opposite. We find that media bias may increase when there are more conscientious consumers. However, this increased media bias does not necessarily hurt conscientious consumers who may be able to recover more information from multiple media outlets the more the outlets are biased. We discuss the practical implications of these findings for media positioning, media pricing, media planning, and the targeting of advertising.

Suggested Citation

  • Yi Xiang & Miklos Sarvary, 2007. "News Consumption and Media Bias," Marketing Science, INFORMS, vol. 26(5), pages 611-628, 09-10.
  • Handle: RePEc:inm:ormksc:v:26:y:2007:i:5:p:611-628
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    File URL: http://dx.doi.org/10.1287/mksc.1070.0279
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    References listed on IDEAS

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    1. Djankov, Simeon & et al, 2003. "Who Owns the Media?," Journal of Law and Economics, University of Chicago Press, vol. 46(2), pages 341-381, October.
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    10. repec:hrv:faseco:33078973 is not listed on IDEAS
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    Citations

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    Cited by:

    1. Dewenter, Ralf & Heimeshoff, Ulrich, 2015. "More ads more revs: A note on media bias in review likelihood," Economic Modelling, Elsevier, vol. 44(C), pages 156-161.
    2. Yi Xiang & David A. Soberman, 2011. "Preview Provision Under Competition," Marketing Science, INFORMS, vol. 30(1), pages 149-169, 01-02.
    3. Emeric Henry, 2009. "Disclosure of research results: the cost of proving your honesty," Sciences Po publications info:hdl:2441/eu4vqp9ompq, Sciences Po.
    4. Oliver Budzinski, 2008. "Europäische Medienmärkte: Die Rolle der Wettbewerbspolitik," MAGKS Papers on Economics 200806, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    5. Khim-Yong Goh & Kai-Lung Hui & Ivan P. L. Png, 2011. "Newspaper Reports and Consumer Choice: Evidence from the Do Not Call Registry," Management Science, INFORMS, vol. 57(9), pages 1640-1654, February.
    6. Monic Sun & Feng Zhu, 2011. "Ad Revenue and Content Commercialization: Evidence from Blogs," Working Papers 11-32, NET Institute.
    7. 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.
    8. Juanjuan Zhang, 2011. "The Perils of Behavior-Based Personalization," Marketing Science, INFORMS, vol. 30(1), pages 170-186, 01-02.
    9. repec:hrv:faseco:33078973 is not listed on IDEAS

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