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What Do Media Outlets Compete For?


  • Ascensión Andina

    () (Universidad de Alicante)


This paper studies broadcasting competition, considering not only television stations that maximize profits but stations that want to influence voters. Following two strands of the psychological literature, we argue that media exert influence on two different ways: (i) they can reinforce viewers in their prior opinions, (ii) they can modify viewers' attitudes. We consider agents who flip through the outlets according to pleasantness. In this context, we show that the aim of maximizing profits and the objective of political influence result in different equilibrium ideological locations. This is so since the economic aspect pushes television stations to locate closer and political considerations lead them to polarize their locations. We also show that both results do not depend on the way media exert influence, but they do on the fact that viewers do channel hopping. In particular, we observe that, due to channel hopping, the equilibrium outcome may not be represented by the median viewer location when stations maximize profits and a extreme polarization arises when outlets aim is to maximize political influence.

Suggested Citation

  • Ascensión Andina, 2003. "What Do Media Outlets Compete For?," Working Papers. Serie AD 2003-19, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  • Handle: RePEc:ivi:wpasad:2003-19

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    References listed on IDEAS

    1. Gabszewicz, Jean J. & Laussel, Dider & Sonnac, Nathalie, 2001. "Press advertising and the ascent of the 'Pensee Unique'," European Economic Review, Elsevier, vol. 45(4-6), pages 641-651, May.
    2. AlÌcia Adserý, 2003. "Are You Being Served? Political Accountability and Quality of Government," Journal of Law, Economics, and Organization, Oxford University Press, vol. 19(2), pages 445-490, October.
    3. Timothy Besley & Andrea Prat, 2006. "Handcuffs for the Grabbing Hand? Media Capture and Government Accountability," American Economic Review, American Economic Association, vol. 96(3), pages 720-736, June.
    4. Joseph E. Harrington & S. Brock Blomberg, 2000. "A Theory of Rigid Extremists and Flexible Moderates with an Application to the U.S. Congress," American Economic Review, American Economic Association, vol. 90(3), pages 605-620, June.
    5. Norbert Schulz & Joachim Weimann, 1989. "Competition of newspapers and the location of political parties," Public Choice, Springer, vol. 63(2), pages 125-147, November.
    6. 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.
    7. repec:cup:apsrev:v:77:y:1983:i:04:p:974-990_25 is not listed on IDEAS
    8. Stromberg, David, 2001. "Mass media and public policy," European Economic Review, Elsevier, vol. 45(4-6), pages 652-663, May.
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    More about this item


    Television; channel hopping; audience;

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • L8 - Industrial Organization - - Industry Studies: Services


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