TY  - JOUR
AU  - Gentzkow,Matthew
AU  - Shapiro,Jesse
TI  - Media Bias and Reputation
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11664
PY  - 2005
Y2  - October 2005
UR  - http://www.nber.org/papers/w11664
L1  - http://www.nber.org/papers/w11664.pdf
N1  - Author contact info:
Matthew Gentzkow
University of Chicago
Booth School of Business
5807 South Woodlawn Avenue
Chicago, IL 60637
Tel: 773/834-2177
Fax: 773/702-0458
E-Mail: gentzkow@chicagobooth.edu

Jesse M. Shapiro
University of Chicago
Booth School of Business
5807 S. Woodlawn Avenue
Chicago, IL 60637
Tel: 773/834-2688
Fax: 773-753-0563
E-Mail: jmshapir@uchicago.edu
AB  - A Bayesian consumer who is uncertain about the quality of an information source will infer that the source is of higher quality when its reports conform to the consumer's prior expectations. We use this fact to build a model of media bias in which firms slant their reports toward the prior beliefs of their customers in order to build a reputation for quality. Bias emerges in our model even though it can make all market participants worse off. The model predicts that bias will be less severe when consumers receive independent evidence on the true state of the world, and that competition between independently owned news outlets can reduce bias. We present a variety of empirical evidence consistent with these predictions.
ER  -