Competition and Ideological Diversity: Historical Evidence from US Newspapers
- (pp. 3073-3114)
Abstract
We study the competitive forces which shaped ideological diversity in the US press in the early twentieth century. We find that households preferred like-minded news and that newspapers used their political orientation to differentiate from competitors. We formulate a model of newspaper demand, entry, and political affiliation choice in which newspapers compete for both readers and advertisers. We use a combination of estimation and calibration to identify the model's parameters from novel data on newspaper circulation, costs, and revenues. The estimated model implies that competition enhances ideological diversity, that the market undersupplies diversity, and that optimal competition policy requires accounting for the two-sidedness of the news market.Citation
Gentzkow, Matthew, Jesse M. Shapiro, and Michael Sinkinson. 2014. "Competition and Ideological Diversity: Historical Evidence from US Newspapers." American Economic Review, 104 (10): 3073-3114. DOI: 10.1257/aer.104.10.3073Additional Materials
JEL Classification
- D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- K21 Antitrust Law
- L13 Oligopoly and Other Imperfect Markets
- L41 Monopolization; Horizontal Anticompetitive Practices
- L82 Entertainment; Media
- N42 Economic History: Government, War, Law, International Relations, and Regulation: U.S.; Canada: 1913-
- N72 Economic History: Transport, Trade, Energy, Technology, and Other Services: U.S.; Canada: 1913-