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Understanding the Internet's relevance to media ownership policy: a model of too many choices

Author

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  • Nagler, Matthew
Abstract
Does the Internet provide a failsafe against media consolidation in the wake of an easing of media ownership rules? This paper posits a model of news outlet selection on the Internet in which consumers experience cognitive costs that increase with the number of options faced. Consistent with psychological evidence, these costs may be reduced by constraining one’s choice set to “safe bets” familiar from offline (e.g., CNN.com). It is shown that, as the number of outlets grows, dispersion of consumer visitation across outlets inevitably declines. Consequently, independent Internet outlets may fail to mitigate lost outlet independence on other media.

Suggested Citation

  • Nagler, Matthew, 2006. "Understanding the Internet's relevance to media ownership policy: a model of too many choices," MPRA Paper 2180, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:2180
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    2. Nagler, Matthew G., 2015. "Trading off the benefits and costs of choice: Evidence from Australian elections," Journal of Economic Behavior & Organization, Elsevier, vol. 114(C), pages 1-12.

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    More about this item

    Keywords

    Choice framing; Media ownership; Internet; Differentiated products; Location models;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

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