Competing for the Public through the News Media
Interest groups seek to influence economic activity through public and private politics. Public politics takes place in the arenas 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 each interest group seeks to influence public sentiment and does so by advocating its position 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 in not to regulate. The activist and the industry obtain private, hard information on the seriousness of the externality and advocate favorable information 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. Due to 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 the market failure by decreasing demand and a government failure by leading to regulation. The activist then has an incentive to conceal information unfavorable to its interests, whereas the industry fully reveals its information.
|Date of creation:||Jun 2003|
|Date of revision:|
|Contact details of provider:|| Postal: Stanford University, Stanford, CA 94305-5015|
Phone: (650) 723-2146
Web page: http://gsbapps.stanford.edu/researchpapers/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Timothy Besley & Robin Burgess, 2002.
"The Political Economy of Government Responsiveness: Theory and Evidence from India,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 117(4), pages 1415-1451.
- Timothy Besley & Robin Burgess, 2000. "The Political Economy of Government Responsiveness: Theory and Evidence from India," STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers 28, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Timothy Besley & Robin Burgess, 2000. "The political economy of government responsiveness: theory and evidence from India," LSE Research Online Documents on Economics 2308, London School of Economics and Political Science, LSE Library.
- Besley, Timothy J. & Burgess, Robin, 2001. "The Political Economy of Government Responsiveness: Theory and Evidence from India," CEPR Discussion Papers 2721, C.E.P.R. Discussion Papers.
- Hansen, Claus Thustrup & Kyhl, Soren, 2001. "Pay-per-view broadcasting of outstanding events: consequences of a ban," International Journal of Industrial Organization, Elsevier, vol. 19(3-4), pages 589-609, March.
- Krehbiel Keith, 1999. "Pivotal Politics: A Refinement of Nonmarket Analysis for Voting Institutions," Business and Politics, De Gruyter, vol. 1(1), pages 63-82, December.
- Simon P. Anderson & Stephen Coate, 2000. "Market Provision of Public Goods: The Case of Broadcasting," NBER Working Papers 7513, National Bureau of Economic Research, Inc.
- Timothy Besley & Robin Burgess & Andrea Pratt, 2002. "Mass media and political accountability," LSE Research Online Documents on Economics 35988, London School of Economics and Political Science, LSE Library.
- David Strömberg, 2004. "Radio's Impact on Public Spending," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 189-221.
- Stephen Erfle & Henry McMillan, 1990. "Media, Political Pressure, and the Firm: The Case of Petroleum Pricing in the Late 1970s," The Quarterly Journal of Economics, Oxford University Press, vol. 105(1), pages 115-134.
- Michael Spence & Bruce Owen, 1977. "Television Programming, Monopolistic Competition, and Welfare," The Quarterly Journal of Economics, Oxford University Press, vol. 91(1), pages 103-126.
- Bovitz, Gregory L & Druckman, James N & Lupia, Arthur, 2002. "When Can a News Organization Lead Public Opinion? Ideology versus Market Forces in Decisions to Make News," Public Choice, Springer, vol. 113(1-2), pages 127-55, October.
- Eli Noam, 1987. "A public and private-choice model of broadcasting," Public Choice, Springer, vol. 55(1), pages 163-187, September.
- Esther Gal-Or & Anthony Dukes, 2003. "Minimum Differentiation in Commercial Media Markets," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 12(3), pages 291-325, 09.
- David P. Baron, 2003. "Private Politics," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 12(1), pages 31-66, 03.
When requesting a correction, please mention this item's handle: RePEc:ecl:stabus:1808. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.