Media competition and information disclosure

Abstract

This paper analyzes an election game where self-interested politicians can exploit the lack of information that citizens have about candidates’ preferred policies in order to pursue their own agendas. In such a setup, we analyze the incentives of newspapers to acquire costly information and that of politicians to make informative speeches, as well as how competition among the media affects such incentives. We show that the higher the number of potential readers and/or the lower the cost of investigating, the more the candidates tend to reveal their motives. We also show that the readers’ purchasing habits play a crucial role in the model. More specifically, we show that if readers always buy a newspaper, media competition favors information disclosure; whereas if they are opportunistic and just buy a newspaper in case news are uncovered, competition is not so desirable.