Eliaz, Kfir;
Spiegler, Ran;
(2027)
News Media as Suppliers of Narratives (and Information).
Theoretical Economics
(In press).
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Abstract
We present a model in which news media shape beliefs by providing information (signals about an exogenous state) and narratives (models of what determines outcomes). To amplify consumersíengagement, the media maximize their anticipatory utility. We characterize the optimal monopolistic media strategy, highlighting the synergy between false narratives and biased information. Consumer heterogeneity gives rise to a novel menu-design problem due to an ìequilibrium data externalityî among consumers. The optimal menu includes false narratives, and can generate polarized beliefs and choices without any information transmission. False narratives and polarization also feature in a competitive version of our model, albeit coupled with complete information. Nevertheless, competition can make some consumers objectively worse off.
| Type: | Article |
|---|---|
| Title: | News Media as Suppliers of Narratives (and Information) |
| Open access status: | An open access version is available from UCL Discovery |
| Publisher version: | https://onlinelibrary.wiley.com/journal/15557561 |
| Language: | English |
| Additional information: | For the purpose of open access, the author(s) has applied a Creative Commons Attribution (CC BY) licence to any Author Accepted Manuscript version arising from this submission. |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL SLASH UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10221283 |
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