User-Generated Content, Social Media Bias and Slant Regulation

Jun HU (University of Paris 2)

Abstract

This paper applies a spatial model in a newspaper market where traditional print newspapers and online newspapers coexist. When readers are biased, and the newspaper firm slants news in a duopolistic market, more competition, for instance, by the introduction of a public-interest media firm will not decrease the media bias. However, it can reduce the price of the print newspaper, but will increase the subscription fee for an online newspaper. The slanting from the media outlets, and the "confirmatory bias" from the consumers' side, along with the user-generated content online, make this kind of government regulation much less effective. The results of the model also show that other regulatory policies, such as public pricing and tax, can decrease the level of media bias, especially the tax policy, which will also increase social welfare.

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