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Rational Ignorance and Negative News in the Information Market

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  • Jill McCluskey
  • Johan F.M. Swinnen

Abstract

While the availability of information has increased rapidly, the public is still considered poorly informed. This paper contributes to the emerging field of media economics by studying how the demand side of the media market affects news production and consumption. We show that consumers are likely to remain imperfectly informed on most issues and that negative news coverage is likely to dominate positive news stories because of demand side effects.

Suggested Citation

  • Jill McCluskey & Johan F.M. Swinnen, 2007. "Rational Ignorance and Negative News in the Information Market," LICOS Discussion Papers 19107, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  • Handle: RePEc:lic:licosd:19107
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    File URL: http://www.econ.kuleuven.be/licos/publications/dp/dp191.pdf
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    References listed on IDEAS

    as
    1. Corneo, Giacomo, 2006. "Media capture in a democracy: The role of wealth concentration," Journal of Public Economics, Elsevier, vol. 90(1-2), pages 37-58, January.
    2. Matthew Gentzkow & Jesse M. Shapiro, 2006. "Media Bias and Reputation," Journal of Political Economy, University of Chicago Press, vol. 114(2), pages 280-316, April.
    3. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65, pages 135-135.
    4. 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.
    5. Sendhil Mullainathan & Andrei Shleifer, 2005. "The Market for News," American Economic Review, American Economic Association, vol. 95(4), pages 1031-1053, September.
    6. Tim Groseclose & Jeffrey Milyo, 2005. "A Measure of Media Bias," The Quarterly Journal of Economics, Oxford University Press, vol. 120(4), pages 1191-1237.
    7. Baron, David P., 2006. "Persistent media bias," Journal of Public Economics, Elsevier, vol. 90(1-2), pages 1-36, January.
    8. repec:cto:journl:v:20:y:2001:i:3:p:431-451 is not listed on IDEAS
    9. repec:hrv:faseco:33078973 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Media; bias; rational ignorance; negative news coverage;

    JEL classification:

    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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