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News Media as Suppliers of Narratives (and Information)

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  • Kfir Eliaz
  • Ran Spiegler
Abstract
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.

Suggested Citation

  • Kfir Eliaz & Ran Spiegler, 2024. "News Media as Suppliers of Narratives (and Information)," Papers 2403.09155, arXiv.org.
    • Handle: RePEc:arx:papers:2403.09155
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    References listed on IDEAS

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    Cited by:

    1. Prabal Roy Chowdhury, 2024. "Persuasion in social media: smoke and mirrors," Discussion Papers 24-03, Indian Statistical Institute, Delhi.

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