1 Introduction
There is a widespread belief that news coverage is politically biased
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. Perhaps because of this
impression, the television news market is becoming increasingly polarized
3
. Fox News' audience
is becoming more and more conservative while CNN's audience is becoming increasingly liberal.
Despite being largely distrustful of the news media, many people get the majority of their news
from the source that is most likely to con rm their prior beliefs
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. Why would rational agents con ne
themselves to a biased source they know is likely to tell them what they already believe? Moreover,
shouldn't competition eliminate biased sources of news?
This paper seeks to provide a theoretical foundation for these recent trends. It is shown that it
can be, in fact, optimal for a rational agent to acquire all his information from the source that is
most likely to con rm his prior beliefs. As he receives more con rmatory reports, there is less incen-
tive to seek out contradictory information. Thus in a biased population, likeminded consumers will
receive their news from the same outlet. Moreover, in a dynamic setting, even an unbiased agent
prefers to receive biased news. An unbiased agent correctly realizes that after receiving his rst bit
of information, he will no longer be unbiased. Thus, he prefers to receive biased information from
the start. Additionally, it is shown that competition may not diminish bias, but actually enhance it.
Finally, despite increasing bias, competition may enhance social welfare by increasing the number
of agents who watch the news.
Bias can come in many forms. News organizations can allot more time to one viewpoint, cover
only stories that support a particular opinion, or simply present false information that favors one
perspective. In this paper, bias refers to the tendency to disproportionately search for, and hence
report, information supporting a particular alternative. For example, a station biased towards Con-
servatives will look for and report reasons why a Republican proposal should be enacted. By doing
so, they will claim that Republicans have the best alternative more often than warranted.
In the formal model, rational agents, who only want to make the correct decision, must choose
1
See Alterman(2003), Coulter(2003), Franken(2003) or Goldberg(2003) for examples.
2
Groseclose and Milyo (2005) provides a measure of media bias for many outlets.
3
http://people-press.org/reports/display.php3?ReportID=215.
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http://65.109.167.118/pipa/pdf/oct03/IraqMedia Oct03 quaire.pdf.
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Convention