The Selective Reporting of Factual Content by Commercial Media

Research Seminars
Academic Areas Marketing
Professor Anthony Dukes, USC Marshall School of Business
January 31, 2013 | 12:30 PM - 2:00 PM | Thursday
AC2MLT, hyderabad, Hyderabad, India
For ISB Community
Commercial media supply factual content to consumers who pay for facts to learn about the state of the world (the state). If media take stances that closely reflect the actual state, they can provide many facts. But, if consumers also value content that matches their opinions, media may want to slant their stances away from the state, which limits the number of facts they can report. In this setting, we ask whether competition among media leads consumers to be better informed. Two key features of our model are that (1) consumers prefer reading more facts, and (2) consumers may infer the state from the stances taken by media, even if they are slanted. While these conditions might suggest that competition encourages media to be more informative, we find, to the contrary, that competitive media leave consumers knowing less by providing fewer facts. We also find that a monopoly medium may be more polarizing than competitive media. Several other novel results, as well as the implications of those findings, are also discussed. Keywords: Cheap-Talk, Factual Content, Information Product, Media Competition