IDEAS home Printed from https://ideas.repec.org/p/ecl/stabus/1808.html
   My bibliography  Save this paper

Competing for the Public through the News Media

Author

Listed:
  • Baron, David P.

    (Baron, David P.)

Abstract

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.

Suggested Citation

  • Baron, David P., 2003. "Competing for the Public through the News Media," Research Papers 1808, Stanford University, Graduate School of Business.
  • Handle: RePEc:ecl:stabus:1808
    as

    Download full text from publisher

    File URL: http://gsbapps.stanford.edu/researchpapers/library/RP1808.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Krehbiel, Keith, 1999. "Pivotal Politics: A Refinement of Nonmarket Analysis for Voting Institutions," Business and Politics, Cambridge University Press, vol. 1(01), pages 63-81, April.
    2. 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.
    3. Besley, Timothy & Burgess, Robin & Pratt, Andrea, 2002. "Mass media and political accountability," LSE Research Online Documents on Economics 35988, London School of Economics and Political Science, LSE Library.
    4. 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.
    5. 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, September.
    6. 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.
    7. David P. Baron, 2003. "Private Politics," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 12(1), pages 31-66, March.
    8. 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.
    9. Eli Noam, 1987. "A public and private-choice model of broadcasting," Public Choice, Springer, vol. 55(1), pages 163-187, September.
    10. 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.
    11. repec:cup:apsrev:v:90:y:1996:i:02:p:303-315_20 is not listed on IDEAS
    12. 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 127-155, October.
    13. 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.
    14. David Strömberg, 2004. "Radio's Impact on Public Spending," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 189-221.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Börner, Kira, 2004. "Political Economy Reasons for Government Inertia: The Role of Interest Groups in the Case of Access to Medicines," Discussion Papers in Economics 313, University of Munich, Department of Economics.
    2. Jonathan Reuter & Eric Zitzewitz, 2006. "Do Ads Influence Editors? Advertising and Bias in the Financial Media," The Quarterly Journal of Economics, Oxford University Press, vol. 121(1), pages 197-227.
    3. Boerner, Kira, 2005. "Having Everyone in the Boat May Sink it - Interest Group Involvement and Policy Reforms," Discussion Papers in Economics 730, University of Munich, Department of Economics.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. 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: (). General contact details of provider: http://edirc.repec.org/data/gsstaus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.