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Press Subsidies and Information in a Democratic Society

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  • Martin A. Leroch

    (Institute of Political Science, Unit Politics and Economy, Johannes Gutenberg-Universitaet Mainz, Germany)

Abstract

In this paper we analyze how subsidies may a ect the qual- ity provision of newspapers in three structures dominating this market: monopolistic structures as is the case for many regional newspapers, duopolistic structures, as is the case for newspaper markets in metropolitan areas or, possibly, nation-wide newspa- pers, as well as markets with monopolistic competition. We and that frequently used sales subsidies may be counter-productive as they can lead the newspaper to reduce journalistic quality. We conclude that a possibly better way to sustain high levels of jour- nalistic quality would be to invest in the consumption capital of the readers.

Suggested Citation

  • Martin A. Leroch, 2015. "Press Subsidies and Information in a Democratic Society," Working Papers 1508, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz.
    • Handle: RePEc:jgu:wpaper:1508
    as

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    File URL: https://download.uni-mainz.de/RePEc/pdf/Discussion_Paper_1508.pdf
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    References listed on IDEAS

    as
    1. Dewenter, Ralf, 2003. "Rational Addiction to News?," Working Paper 2/2003, Helmut Schmidt University, Hamburg.
    2. Leroch, Martin A. & Wellbrock, Christian M., 2011. "Saving newspapers with public grants – The effects of press subsidies on the provision of journalistic quality," Information Economics and Policy, Elsevier, vol. 23(3), pages 281-286.
    3. A. Michael Spence, 1975. "Monopoly, Quality, and Regulation," Bell Journal of Economics, The RAND Corporation, vol. 6(2), pages 417-429, Autumn.
    4. Stigler, George J & Becker, Gary S, 1977. "De Gustibus Non Est Disputandum," American Economic Review, American Economic Association, vol. 67(2), pages 76-90, March.
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