Strategic Complementarities in a Model of Commercial Media Bias

Anna Kerkhof () and Johannes Münster
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Anna Kerkhof: LMU Munich and ifo Institute for Economic Research
Johannes Münster: University of Cologne johannes.muenster@uni-koeln.de

No 261, ECONtribute Discussion Papers Series from University of Bonn and University of Cologne, Germany

Abstract: Media content is an important privately supplied public good. While it has been shown that contributions to a public good crowd out other contributions in many cases, the issue has not been thoroughly studied for media markets yet. We show that in a standard model of commercial media bias, qualities of media content are strategic complements, whereby investments into quality crowd in further investments and engage competitors in a race to the top. Therefore, financially strong public service media can mitigate commercial media bias: the content of commercial media can be more in line with the preferences of the audience and less advertiser-friendly in a dual (mixed public and commercial) media system than in a purely commercial media market.

Keywords: commercial media bias; public service media; advertising; two-sided markets; supermodular games; strategic complements; public goods (search for similar items in EconPapers)
JEL-codes: C70 H41 L13 L51 L82 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2023-10
New Economics Papers: this item is included in nep-gth and nep-mic
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