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Cross-checking the media
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1830-7728
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EUI MWP; 2013/17
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RUDIGER, Jesper, Cross-checking the media, EUI MWP, 2013/17 - https://hdl.handle.net/1814/27461
Abstract
A characteristic of the news market is that consumers often cross-check information, i.e. observe several news outlets. At the same time, data on political media suggest that more partisan consumers are more likely to cross-check. We explore these phenomena by building a model of horizontal competition in newspaper endorsements. Without cross-checking, outlets are unbiased and minimally differentiated. When cross-checking is allowed, we show that cross-checkers are indeed more partisan than those who only acquire one report. Furthermore, cross-checking induces outlets to differentiate, and the degree of differentiation is increasing in the dispersion of consumer beliefs. Differentiation is detrimental to consumer welfare, and a single monopoly outlet may provide higher consumer welfare than a competitive duopoly.