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KDI 경제정보센터

ENG
  • Economic

    Information

    and Education

    Center

최신자료
News Media as Suppliers of Narratives (and Information)
CEPR
2024.05.21
We present a model of news media that shape consumer beliefs by providing information (signals about an exogenous state) and narratives (models of what determines outcomes). To amplify consumers‘ engagement, media maximize consumers‘ anticipatory utility. Focusing on a class of separable consumer preferences, we show that a monopolistic media platform facing homogenous consumers provides a false "empowering" narrative coupled with an optimistically biased signal. Consumer heterogeneity gives rise to a novel menu-design problem due to a "data externality" among consumers. The optimal menu features multiple narratives and creates polarized beliefs. These effects also arise in a competitive media market model.