Paper #1133

Title:

On commercial media bias

Author:

Fabrizio Germano

Date:

December 2008 (Revised: April 2009)

Abstract:

Within the spokes model of Chen and Riordan (2007) that allows for non-localized competition among arbitrary numbers of media outlets, we quantify the effect of concentration of ownership on quality and bias of media content. A main result shows that too few commercial outlets, or better, too few separate owners of commercial outlets can lead to substantial bias in equilibrium. Increasing the number of outlets (commercial and non-commercial) tends to bring down this bias; but the strongest effect occurs when the number of owners is increased. Allowing for free entry provides lower bounds on fixed costs above which substantial commercial bias occurs in equilibrium.

Keywords:

Commercial media, concentration and consolidation, media bias, self-censorship, ownership structure

JEL codes:

L13, L82

Area of Research:

Microeconomics

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