The Market for News

By Sendhil Mullainathan, A. Shleifer. 2005

1,300 citations recorded by the source corpus.

We investigate the market for news under two assumptions: that readers hold beliefs which they like to see confirmed, and that newspapers can slant stories toward these beliefs. We show that, on the topics where readers share common beliefs, one should not expect accuracy even from competitive media: competition results in lower prices, but common slanting toward reader biases. On topics where reader beliefs diverge (such as politically divisive issues), however, newspapers segment the market and slant toward extreme positions. Yet in the aggregate, a reader with access to all news sources could get an unbiased perspective. Generally speaking, reader heterogeneity is more important for accuracy in media than competition per se.

Subfields: Accounting, Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/ec611196f7253c7cb26157f08bde98f48a7f6401

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Citations in the corpus

More Voices Than Ever? Quantifying Media Bias in Networks (2011, background): “A dependence on viewers’ beliefs has been observed in studies [2, 4], which is relevant to the theories on how supply-side forces or profit-related factors cause slants in media [7, 8].”
Media Bias and Advertising: Evidence from a German Car Magazine (2014, background): “GAL-OR et al. (2012) add to the work of MULLAINATHAN & SHLEIFER (2005) and analyze media bias when advertising is included as an important source of revenues.”
Who Writes the News? Corporate Press Releases During Merger Negotiations (2014, neutral): “…political and economic biases (Groseclose and Milyo, 2005), and that these biases tend to be slanted towards the customers of the media outlet (Mullainathan and Shleifer, 2005; Gentzkow and Shapiro, 2006, 2010), the media firm’s advertisers (Reuter and Zitzewitz, 2006; Gurun and Butler,…”
The impact of newspapers on consumer confidence: does spin bias exist? (2004, neutral): “Mullainathan and Shleifer (2002, 2005) argue that there are two types of media bias.”
Social Media, News Consumption, and Polarization: Evidence from a Field Experiment (2020, background): “The TOT effect of the counter-attitudinal 2This could occur since outlets sharing the consumers’ ideologies convey more useful information (Chan and Suen, 2008), provide direct utility (Mullainathan and Shleifer, 2005), or are perceived to be of higher quality (Gentzkow and Shapiro, 2006).”
Handcuffs for the Grabbing Hand? Media Capture and Government Accountability (2006, neutral): “A model in that direction is developed by Mullainathan and Shleifer [ 22 ].24”
Media Coverage and the Cross-Section of Stock Returns (2008, background): “Ang et al. (2006) (AHXZ) document that stocks with high idiosyncratic 3 A separate stream of research represented by Mullainathan and Shleifer (2005) and Gentzkow and Shapiro (2006a, 2006b) studies media bias.”
Thought and Behavior Contagion in Capital Markets (2008, neutral): “A natural application of social learning models is to the adoption of financial innovations such as leveraged buyouts, which often seem to follow a boom and bust pattern.”
The Causal Impact of Media in Financial Markets (2011, background): “, Stromberg (2004), Gentzkow and Shapiro (2004), Gentzkow (2006), and Gerber et al.”
Fair and Balanced? Quantifying Media Bias through Crowdsourced Content Analysis (2016, background): “…39% and 6% net left-leaning, respectively. premised on the idea that consumers patronize the news outlet that is closest to their ideological ideal point (as in Mullainathan and Shleifer (2005)), implying the political attitudes of an outlet's audience are indicative of the outlet's ideology.”
Costly Information Processing: Evidence from Earnings Announcements (2008, background): “…trend in the literature demonstrating the key role of the media as an information intermediary (Huberman and Regev (2001), Dick and Zingales (2002, 2003), Miller (2006), Tetlock (2007), Tetlock et al. (2007), Bushee et al. (2007), Bhattacharya et al. (2008) and Mullainathan and Shleifer (2005)).”