This dissertation examines various means by which the profit motives of media firms can directly result in biased information transmission. In the first two chapters, I analyze to what extent conflicts of interest in expert review industries may result in artificially inflated reviews, with a particular application to the video game journalism industry. The third chapter demonstrates how dynamics in news media create incentives for news firms to exacerbate political conflict among their consumers. In Chapter 1, I note that there exists robust evidence of a relationship between expert reviews and product demand but little about the mechanism by which this occurs. I show that the informational role of a review alone is insufficient to generate inflated product reviews and that inflated reviews can arise endogenously in the presence of positive network externalities. I use these theoretical results to conduct empirical analysis of the video game journalism industry and find corroborating evidence of review inflation. Specifically, I find there to be higher inflation for games released by larger game producers and for games from preexisting game franchises. In Chapter 2, I examine a specific case of conflict of interest in the video game journalism industry. Game Informer is a video game magazine that is owned by Gamestop, a large video game retailer. I find evidence of inflation in several ways consistent with the expected behavior of a conglomerate seeking to maximize total profits. In particular, I find inflation to be higher for lower quality games and for games that require more recently released hardware to play. Surprisingly, I find no evidence of seasonal inflation. In Chapter 3, I address a gap in the literature on political slant in news media regarding the means and incentives news firms have to affect their consumers' beliefs over time. Specifically, I show that competitive tensions generate an incentive for media firms to intentionally polarize consumers in order to increase product differentiation, and that this can occur even if consumers are initially homogeneous and unbiased. Computational analysis and simulations corroborate this analysis.

Last modified

• 04/27/2018

Creator

• Tomer Hamami

DOI

• https://doi.org/10.21985/N2B701

Subject

• Managerial Economics and Strategy

Keyword

• News Slant
• Media Bias
• Political Polarization
• Network Effects
• Information Transmission
• Product Reviews

Date created

• 2017-01-01

Resource type

• Dissertation

Rights statement

• In Copyright