Ideological media bias

I develop a model of the market for news in which consumers and reporters both ideologically misinterpret information and have biased beliefs about the extent to which others misinterpret information. I show that for some parameter values, in equilibrium: (i) a monopolist media outlet hires a politically moderate reporter but duopolist outlets use relatively extreme, differentiated reporters; (ii) in duopoly, consumers think of their preferred outlet's news reporter as relatively unbiased and the other outlet's reporter as relatively biased; (iii) consumers, in the aggregate, may be less informed in duopoly than monopoly, despite more consumers receiving news in duopoly.

Research highlights
► I model the news market assuming consumers and reporters have ideological biases.
► All agents also have biased beliefs about the ideological biases.
► In the model, consumers desire unbiased news but disagree on media bias.
► The model implies increasing competition may reduce consumers information.
► This occurs despite increasing competition causing more consumers to receive news.