Paper #1348

Títol:

Time scarcity and the market for news

Autors:

Larbi Alaoui i Fabrizio Germano

Data:

Desembre 2012

Resum:

We develop a theory of news coverage in environments of information abundance. Time-constrained consumers browse through news items across competing outlets. They choose which outlets to access and which stories to read or skip, thus indirectly deciding how much time to spend on a given outlet. Firms decide on rankings of news items that maximize their profits. We show that even when readers (or television viewers) and firms are rational and unbiased, they spend more time on the news than they would like and not necessarily on the topics they prefer. In particular, relevant news items may be crowded out. We then study how reader-efficient standards can be restored and derive implications on diverse aspects of current media, including advertising and reader preference for like-minded news.

Paraules clau:

News markets; news coverage; time constrained consumers; media competition; digital media.

Codis JEL:

H44; L13; L82; L86.

Àrea de Recerca:

Economia Experimental i del Comportament / Microeconomia

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