2005/08/01 by Sendhil Mullainathan, Andrei Shleifer · 9 citations
Social Sciences · Business, Management and Accounting · Economics, Econometrics and Finance · #Media Influence and Politics #Corporate Finance and Governance #Merger and Competition Analysis
paper · doi:10.1257/0002828054825619
openalex publication_date 2005/08/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/19
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.