Media bias with asymmetric media quality

ABSTRACT

This paper develops a location model of media bias with asymmetric media quality. In the model, media quality is defined as an ability to reduce the boundedly rational consumers’ efforts in reasoning information. The model shows that an equilibrium bias exists unless the cost of a high-quality media outlet for adjusting bias is small enough. The size and location of the equilibrium bias gap between media outlets depend on the quality difference. The results may provide a comprehensive understanding of the existing views that competition increases or lessens the media bias.

KEYWORDS:

• Media bias
• media quality
• bounded rationality
• digital technology

JEL:

• D83
• L13
• L82

Disclosure statement

No potential conflict of interest was reported by the author.

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.

Notes

¹ Gentzkow and Shapiro (2006) develop a model in which this quality definition is combined with asymmetrically given media quality and a Bayesian consumer who will tend to judge information to be higher quality when it matches the consumer’s bias.

² Mullainathan and Shleifer (2005) think about the presentation of information demanded by consumers, such as explanation, interpretation, persuasion, and entertainment. However, they assume symmetric quality; thus, do not consider the differences in presentation as differences in quality, but only as means to meet consumers’ bias.

³ Ferreira and Thisse (1996) present only the symmetric location cases while this paper analyzes all location cases under given prices.

⁴ Yang (2020) studies the media bias with a digital intermediary, employing Launhardt’s idea. Yang assumes the symmetric quality between media outlets and defines quality as all kinds of information transfer capabilities to increase consumers’ utility.

⁵ Examples of costs: persuasion; coercion; hiring journalists with the bias that the media outlet wants.

⁶ When $c_1<c_2$, $c_1>0$ does not change the key qualitative results of the model. Its formal analysis is beyond the scope of the paper.

⁷ In the digital news markets, most (but not all) media outlets provide the news to consumers virtually free of charge.

⁸ Brocas, Carrillo, and Wilkie (2011) argue that when one of two firms having the same viewpoint is marginally more informative than the other in duopolistic competition, it can capture whole market demand and there cannot be an equilibrium. This is due to what they refer to as ‘Informational Bertrand Competition’. If ‘more informative’ can be interpreted as ‘higher quality’, it supports that the case where $a=1-b$ cannot be an equilibrium.

⁹ According to the Media Bias Chart 6.0 by Ad Fontes Media, the lower quality, the more extreme or partisan bias. https://www.adfontesmedia.com