Working Paper: NBER ID: w14360
Authors: Alexander Dyck; David Moss; Luigi Zingales
Abstract: We argue that profit-maximizing media help overcome the problem of "rational ignorance" highlighted by Downs (1957) and in so doing make elected representatives more sensitive to the interests of general voters. By collecting news and combining it with entertainment, media are able to inform passive voters on politically relevant issues. To show the impact this information has on legislative outcomes, we document the effect "muckraking" magazines had on the voting patterns of U.S. representatives and senators in the early part of the 20th century. We also show under what conditions profit-maximizing media will cater to general (less affluent) voters in their coverage, providing a counterbalance to special interests.
Keywords: No keywords provided
JEL Codes: L51; N41; P16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| muckraking magazines (Y30) | voting behavior of U.S. representatives (D72) |
| higher circulation of muckraking magazines (N91) | vote in favor of regulations that align with public interests (D72) |
| muckraking articles (D73) | senators' votes for direct election of senators (K16) |
| profit-maximizing media (L21) | legislative outcomes (D72) |
| profit-maximizing media (L21) | reduce rational ignorance (D72) |