residential spatial growth with perfect foresight and multiple income groups abstract this paper presents explicit solutions for expanding monocentric cities with two or more income groups housing is durable but deteriorates over time and redevelopment cannot take place landlords have perfect foresight the utility function and housing technology are cobb douglas population per capita income and transportation costs per mile change at constant percentage rates the model is solved analytically using an infinite time horizon as development proceeds outward a constant fraction of land is developed with high income housing and the remaining land is reserved for future low income development at any time housing is constructed at one distance for high income consumers and at a lesser distance for low income consumers high income housing is first occupied by high income consumers then filters to low income consumers and is ultimately abandoned low income housing is first occupied by low income households and ultimately abandoned

media competition and electoral politics we build a framework linking competition in the media market to political participation media outlets report on the ability of candidates running for office and compete for audience through their choice of slant citizens consume news only if the expected utility of being informed about candidates ability is sufficiently large for their group collectively our results can reconcile seemingly contradictory empirical evidence showing that entry in the media market can either increase or decrease turnout while information pushes up independent turnout partisans adjust their turnout to the ability of their preferred candidate and on average they vote less when informed

the effects of potential land development on agricultural land prices abstract we conduct a national scale analysis of the determinants of agricultural land values the theoretical basis for the study is a spatial city model with stochastic returns to future land development the empirical model of agricultural land prices is estimated with a cross section on approximately three thousand counties in the contiguous us the results provide evidence that option values associated with irreversible and uncertain land development are capitalized into current farmland values for each county we decompose the current agricultural land value into components measuring rents from agricultural production and rents from future land development

market provision of broadcasting a welfare analysis this paper presents a theory of the market provision of broadcasting and uses it to address the nature of market failure in the industry advertising levels may be too low or too high depending on the nuisance cost to viewers the substitutability of programs and the expected benefits to advertisers from contacting viewers market provision may allocate too few or too many resources to programming and these resources may be used to produce programs of the wrong type monopoly ownership may produce higher social surplus than competitive ownership and the ability to price programming may reduce social surplus

agricultural land values and the value of rights to future land development we investigate the inuence of fu ture land development on current agricultural land values from a theoretical model of land markets we derive a reduced form expression for agricultural land values in terms of observable variables this result dictates the speci cation of our econometric model and we nd strong sup port for the model in an application to new york state the estimated model together with a spa tial interpolation algorithm is used to generate a surface of estimated development rights values for orange county this approach overcomes several problems that arise with the use of stan dard appraisal methods to value conservation easements jel q24

causes of sprawl a portrait from space we study the extent to which u s urban development is sprawling and what determines differences in sprawl across space using remote sensing data to track the evolution of land use on a grid of 8 7 billion 30 30 meter cells we measure sprawl as the amount of undeveloped land surrounding an average urban dwelling the extent of sprawl remained roughly unchanged between 1976 and 1992 although it varied dramatically across metropolitan areas ground water availability temperate climate rugged terrain decentralized employment early public transport infrastructure uncertainty about metropolitan growth and unincorporated land in the urban fringe all increase sprawl

uninformed votes information effects in presidential elections theory recent scholarship has emphasized the potential importance of cues information shortcuts and statistical aggregation processes in allowing relatively uninformed citizens to act individually or collectively as if they were fully informed hypotheses uninformed voters successfully use cues and information shortcuts to behave as if they were fully informed failing that individual deviations from fully informed voting cancel out in a mass electorate producing the same aggregate election outcome as if voters were fully informed methods hypothetical fully informed vote choices are imputed to individual voters using the observed relationship between political information and vote choices for voters with similar social and demographic characteristics estimated by probit analysis of data from national election study surveys conducted after the six most recent united states presidential elections results both hypotheses are clearly disconfirmed at the individual level the average deviation of actual vote probabilities from hypothetical fully informed vote probabilities was about ten percentage points in the electorate as a whole these deviations were significantly diluted by aggregation but by no means eliminated incumbent presidents did almost five percentage points better and democratic candidates did almost two percentage points better than they would have if voters had in fact been fully informed

quantity restrictions on advertising commercial media bias and welfare abstract we study the welfare effect of a quantity restriction on advertising in free to air television and other advertising financed media in the presence of commercial media bias broadcasters face a trade off between increasing the number of viewers by sending content that is highly valued by viewers and increasing the price of advertising by choosing advertiser friendly content a cap on advertising drives the per viewer price of ads up thus content improves for viewers therefore the cap can be welfare enhancing even when viewers are not ad averse competition among broadcasters makes it more likely that a cap on advertising improves welfare thus there is a complementarity between regulation and competition on this market we also show that a tax on advertising revenues has quite different effects than a cap on advertising quantity

competition and truth in the market for news in this essay we evaluate the case for competition in news markets from the perspective of economics first we consider the simple proposition that when more points of view are heard and defended beliefs will converge to the truth this concept of competition is several steps removed from market competition among actual media firms but it has played a prominent role in the legal arguments for a free press we then explore three mechanisms by which increasing competition or more precisely increasing the number of independently owned firms can limit bias or distortions that originate on the supply side of the media market first when governments attempt to manipulate news competition can increase the likelihood that the media remain independent second when news providers have an interest in manipulating consumers beliefs diversity in such incentives can reduce the risk of information being suppressed or distorted third competition may drive firms to invest in providing timely and accurate coverage overall we argue that there are robust reasons to expect competition to be effective in disciplining supply side bias next we ask how the effect of competition changes when distortions originate on the demand side of the market when consumers themselves demand biased or less socially relevant news we find that increased competition may or may not improve welfare in these cases though we caution against using this as a justification for concentrating media power in the hands of state controlled or regulated firms

concentration and self censorship in commercial media within a simple model of non localized hotelling type competition among arbitrary numbers of media outlets we characterize quality and content of media under dierent ownership structures assuming advertising sponsored prot maximizing outlets we show that i topics sensitive to advertisers can be underreported self censored by all outlets in the market ii self censorship increases with the concentration of ownership iii adding outlets while keeping the number of owners xed may even increase self censorship the latter result relies on consumers most preferred outlets being potentially owned by the same media companies we argue that externalities resulting from self censorship could be empirically large

citizen editors endogenous information acquisition and news accuracy abstract this paper provides a model of the market for news where profit maximizing media outlets choose their editors from a population of rational citizens the analysis identifies a novel mechanism of media bias the bias in a media outlet s news reports is the result of the slanted endogenous information acquisition strategy of its editor in particular the results show that the expected accuracy of news reports is lower the more ideological an editor is nevertheless citizens find it optimal to acquire information from a media outlet whose editor has similar ideological preferences depending on the distribution of citizens ideological preferences a media outlet may choose an ideological editor even in a monopolistic market moreover ideological editors are more likely to be present in the market for news i the higher the number of media outlets competing in the market for news ii the lower the opportunity cost that citizens have to incur to acquire information

optimal spatial growth of employment and residences abstract this paper examines the location patterns of employment and residences in an urban area characterized by irreversible land use commitments and smoothly growing population it is assumed that all output is shipped to the center of the urban area and that workers have commuting costs of getting to work the optimal solution which is also the equilibrium solution minimizes the present discounted value of aggregate shipping costs plus commuting costs the residential area expands outward over time but a constant fraction of the land is always reserved for future employment development

an empirical analysis of the role of the medium of exchange in mergers in empirical studies of differences between firms which are acquired and those which are not researchers typically divide firms into two groups acquired and nonacquired in this paper we argue that cash takeovers may be sufficiently different from noncash acquisitions that failure to distinguish between them may lead to inappropriate generalizations we provide evidence from the mid 1970s that three categories of firms can be distinguished nonacquired acquired in a cash takeover and acquired in an exchange of securities there is a substantial empirical literature exploring the differences between firms which are acquired and those which are not typically these studies divide firms into two groups acquired and nonacquired and analyze the differences in the characteristics of the two groups using binary dependent variable techniques such as discriminant analysis or probit analysis a fundamental shortcoming of these studies is that no distinctions are made concerning the nature of the merger or the acquiring firm that is it is assumed that acquired firms fall into a single category that is distinguishable from nonacquired firms in fact individual acquisitions may be motivated by quite different features suggesting that more than a single category of acquired firms should be analyzed in this paper we argue that cash takeovers may be sufficiently different from noncash acquisitions that modeling the events as being the same i e just mergers may be inappropriate we then provide evidence using data for the mid 1970s that three types of firms can be distinguished nonacquired acquired in a cash takeover and acquired in an exchange of securities the paper is organized as follows in the next section we suggest why firms acquired for cash may be quite different from firms acquired by an exchange of securities section ii describes the empirical techniques which are used and

agency conflicts in public and negotiated transfers of corporate control we analyze control transfers in firms with a dominant minority blockholder and otherwise dispersed owners and show that the transaction mode is important negotiated block trades preserve a low level of ownership concentration inducing more inefficient extraction of private benefits in contrast public acquisitions increase ownership concentration resulting in fewer private benefits and higher firm value within our model the incumbent and new controlling party prefer to trade the block because of the dispersed shareholders free riding behavior we also explore the regulatory implications of this agency problem and its impact on the terms of block trades

time scarcity and the market for news abstract we develop a theory of news coverage in environments of information abundance time constrained consumers browse through news items across competing outlets they choose which outlets to access and which stories to read or skip thus indirectly deciding how much time to spend on a given outlet firms decide on rankings of news items that maximize their profits we show that even when readers or television viewers and firms are rational and unbiased they spend more time on the news than they would like and not necessarily on the topics they prefer in particular relevant news items may be crowded out we then study how reader efficient standards can be restored and derive implications on diverse aspects of new and traditional media these include tabloidization and polarization of the news and other aspects relevant for the political economy of the media including political knowledge gaps and voter turnout

a spatial theory of news consumption and electoral competition we characterize the optimal editorial positions of the media in a model in which the media influence both voting behaviour and party policies political parties are less likely to choose partisan policies when more voters consume informative news when there are two media outlets each should be slightly biased relative to its audience in order to attract voters with relatively extreme views voter welfare is typically higher under a duopoly than under a monopoly two media outlets under joint ownership may provide more diverse viewpoints than two independent ones but voter welfare is not always higher copyright 2008 wiley blackwell

competition and the medium of exchange in takeovers the role of the medium of exchange in competition among bidders and its effect on returns to stockholders in corporate takeovers are investigated consistent with recent empirical evidence our model shows that stockholders of both acquiring and target firms obtain higher returns when a takeover is financed with cash rather than equity and that returns to target shareholders increase with competition the model predicts that the fraction of synergy captured by the target decreases with the level of synergy finally it is shown that as competition increases the cash component of the offer as well as the proportion of cash offered increases article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

integration and search engine bias competition authorities all over the world worry that integration between search engines mainly google and publishers could lead to abuses of dominant position in particular one concern is that of own content bias meaning that google would bias its rankings in favor of the publishers it owns or has an interest in to the detriment of competitors and users in order to investigate this issue we develop a theoretical framework in which the search engine i allocates users across publishers and ii competes with publishers to attract advertisers we show that the search engine is biased against publishers that display many ads even without integration although integration may lead to own content bias it can also reduce bias by increasing the value of a marginal consumer to the search engine integration also has a positive eect on users by reducing the nuisance costs due to excessive advertising its net eect is therefore ambiguous in general and we provide sucient conditions for it to be desirable or not

uniform spatial growth with perfect foresight and durable housing abstract this paper presents explicit solutions for expanding monocentric cities housing is durable and redevelopment cannot take place landlords have perfect foresight the utility function and housing technology are cobb douglas the population of the city per capita income construction costs and transportation costs per mile change at constant percentage rates the model is solved analytically using an infinite time horizon if the population growth rate is greater less than twice the difference between the growth rates of income and transportation costs development density increases decreases with distance from the city center detailed comparative statics are presented for both open city and closed city growth

in google we trust we examine the incentives of a monopolistic search engine funded by advertising to provide reliable search results we distinguish two types of search results sponsored and organic not paid for organic results are most important in searches for online content while sponsored results are more important in product searches by modeling the underlying markets for online content and offline products we can identify the sources of distortions for each type of result and their interaction this explicit treatment proves crucial for understanding not only spillovers across markets but also fundamental policy issues such as the welfare effects of integration in particular integration of the engine with a small fraction of content providers is welfare enhancing when incentives to distort are stronger for sponsored than organic search but welfare reducing in the opposite case

mass media and special interest groups abstract media revenues are an important determinant of media behavior it is generally accepted that news coverage depends not only on the preferences of media consumers but also on the preferences of advertisers or subsidizing groups however existing models reach the opposite conclusions about the relationship between the profitability of advertising and media bias we present a theoretical model that reconciles these results the model shows that the sign of the effect of marginal costs of production or marginal advertising revenues on the level of distortion in news coverage depends on complementarity or substitutability between media bias and audience size for an interest group the existence of a budget constraint for an interest group and media outlets reliance on subscription in addition to advertising revenues

urban spatial development with durable but replaceable capital the theory of urban spatial development until recently has been primarily a static theory of economic equilibrium the models of alonso l mills 6 and muth 7 determine a complete spatial equilibrium between the supply and demand for urban land the study of growth or change in such models therefore has been limited exclusively to comparative statics wheaton 8 it should be clear that the central and in many respects unrealistic assumption of such models is that housing capital is neither physically nor economically durable without durability there is no opportunity cost to old capital no barrier to change and no history to an urban area within such a framework a common set of conclusions emerges regarding urban spatial structure residential density and the price per unit of land decline monotonically from the location of employment a greater population results in higher density at all locations while increases in income or decreases in the cost of travel create a more steeply sloped density and price gradient in the last few years there has been a growing awareness that the equilibrium portrayed by such models does not correctly reflect the process of urban development theoretical papers by anas 2 31 and brueckner 4 and an empirical model by harrison and kain 5 develop an alternative theory of urban spatial development in which the process of growth is explicitly modeled and in which capital is completely durable in their models the spatial development of cities occurs incrementally over time in successive rings from the center of employment outwards the development of each ring is done with myopic foresight and is therefore determined exclusively by market conditions at the time of development once built

efficient and inefficient sales of corporate control this paper develops a framework for analyzing transactions that transfer a company s controlling block from an existing controller to a new controller this framework is used to compare the market rule which is followed in the united states with the equal opportunity rule which is used in many other countries the market rule is superior to the equal opportunity rule in facilitating efficient transfers of control but inferior to it in discouraging inefficient transfers conditions under which one of the two rules is overall superior are identified for example the market rule is superior if existing and new controllers draw their characteristics from the same distributions finally the rules effects on surplus division are analyzed and this examination reveals a rationale for mandatory rules

landscape preferences and patterns of residential development abstract i analyze a model of residential location choice where people derive utility from their proximity to open space when people have such landscape preferences then 1 equilibrium residential development is mixed with undeveloped land 2 equilibrium land price gradients depend sensitively on how land markets are organized are not generally monotonic and may or may not reflect the value of open space and 3 dynamic equilibria generally have the property that more remote areas are developed before more central areas finally when compared to optimal development equilibrium development houses too many residents too close together and remote areas are developed too soon these results imply that equilibrium development may not be sprawling enough and that policies to encourage infill development are not welfare improving

the stochastic city abstract this paper analyzes a simple model of an urban area with growth and uncertainty household income rents and prices for land follow stochastic processes even though investors are risk neutral uncertainty affects both land rents and land prices in equilibrium because the conversion of land from agricultural to urban use is irreversible growth on the other hand affects urban and agricultural land prices but not the level of rents we show that uncertainty i delays the conversion of land from agricultural to urban use ii imparts an option value to agricultural land iii causes land at the boundary to sell for more than its opportunity cost in other uses and iv reduces equilibrium city size

news droughts news floods and u s disaster relief this paper studies the influence of mass media on u s government response to approximately 5 000 natural disasters occurring between 1968 and 2002 these disasters took nearly 63 000 lives and affected 125 million people per year we show that u s relief depends on whether the disaster occurs at the same time as other newsworthy events such as the olympic games which are obviously unrelated to need we argue that the only plausible explanation of this is that relief decisions are driven by news coverage of disasters and that the other newsworthy material crowds out this news coverage

the market for news we investigate the market for news under two assumptions that readers hold beliefs which they like to see confirmed and that newspapers can slant stories toward these beliefs we show that on the topics where readers share common beliefs one should not expect accuracy even from competitive media competition results in lower prices but common slanting toward reader biases on topics where reader beliefs diverge such as politically divisive issues however newspapers segment the market and slant toward extreme positions yet in the aggregate a reader with access to all news sources could get an unbiased perspective generally speaking reader heterogeneity is more important for accuracy in media than competition per se

spatial patterns of residential development abstract a simple dynamic model of residential development with durable housing where all households are identical and all developers have perfect foresight is studied it is shown that unlike the case of static models it is quite possible that house size decreases and thus population density increases with distance from the city center and that the house rent curve has positive gradient in certain area

optimal information disclosure a sender randomly draws a prospect characterized by its profitability to the sender and its relevance to a receiver the receiver observes only a signal provided by the sender and accepts the prospect if his bayesian inference about the prospect s relevance exceeds his opportunity cost the sender s profits are typically maximized by partial information disclosure whereby the receiver is induced to accept less relevant but more profitable prospects switches by pooling them with more relevant but less profitable ones baits extensions include maximizing a weighted sum of sender profits and receiver surplus and allowing the sender to use monetary incentives

search diversion and platform competition abstract platforms use search diversion in order to trade off total consumer traffic for higher revenues derived by exposing consumers to unsolicited products e g advertising we show that competition between platforms leads to lower equilibrium levels of search diversion relative to a monopoly platform when the intensity of competition is high on the other hand if there is only mild competition then competing platforms induce more search diversion relative to a platform monopolist when platforms charge consumers fixed access fees all equilibrium levels of search diversion under platform competition are equal to the monopoly level irrespective of the nature of competition furthermore relative to platforms that cannot charge such fees platforms that charge positive negative access fees to consumers have weaker stronger incentives to divert search

opinion dynamics via search engines and other algorithmic gatekeepers abstract ranking algorithms are the information gatekeepers of the internet era we develop a stylized model to study the interplay between a ranking algorithm and individual clicking behavior we consider a search engine that uses an algorithm based on popularity and on personalization the analysis shows the presence of a feedback effect whereby individuals clicking on websites indirectly provide information about their private signals to successive searchers through the popularity ranking algorithm accordingly when individuals provide sufficiently positive feedback to the ranking algorithm popularity based rankings tend to aggregate information while personalization acts in the opposite direction moreover we find that under fairly general conditions popularity based rankings generate an advantage of the fewer effect fewer websites reporting a given signal attract relatively more traffic overall this highlights a novel ranking driven channel that can potentially explain the diffusion of misinformation as websites reporting incorrect information may attract an amplified amount of traffic precisely because they are few

methods of payment in us banks acquisition efficiency perspectives does the efficiency classification of acquirers have any effect on the method of payment they select for their acquisition and does the selected method of payment have any future efficiency conseq

prominence and consumer search this article examines the implications of prominence in search markets we model prominence by supposing that the prominent firm will be sampled first by all consumers if there are no systematic quality differences among firms we find that the prominent firm will charge a lower price than its less prominent rivals making a firm prominent will typically lead to higher industry profit but lower consumer surplus and welfare the model is extended by introducing heterogeneous product qualities in which case the firm with the highest quality product has the greatest incentive to become prominent and making it prominent will boost industry profit consumer surplus and welfare

the fundamentals of land prices and urban growth abstract in a very simple model in which capital is durable and landowners have perfect foresight the price of urban land has four additive components the value of agricultural land rent the cost of conversion the value of accessibility and the value of expected future rent increases a growth premium in rapidly growing cities the growth premium may easily account for half of the average price of land and may create a large gap between the price of land at the boundary minus conversion cost and the value of agricultural land rent

on the existence of pure and mixed strategy nash equilibria in discontinuous games a game is better reply secure if for every nonequilibrium strategy x and every payoff vector limit u resulting from strategies approaching x some player i has a strategy yielding a payoff strictly above u i even if the others deviate slightly from x if strategy spaces are compact and convex payoffs are quasiconcave in the owner s strategy and the game is better reply secure then a pure strategy nash equilibrium exists better reply security holds in many economic games it also permits new results on the existence of symmetric and mixed strategy nash equilibria

the impact of targeting technology on advertising markets and media competition an important component of advertising effectiveness is the quality of the match between advertisers and the intended recipients of ads traditionally media have been able to tighten such matches by providing content tailored for specific groups of consumers for example local media outlets attract audiences from their localities ensuring that when local advertis ers place ads they are mostly viewed by their potential customer base recently online adver tising has afforded new technologies that tar get consumers directly rather than indirectly through tailored content a leading example of such targeting is based on geographic loca tion as inferred from ip addresses so while the boston globe may have had an advantage in selling ads to boston advertisers now the new york times can offer boston based ads to consumers located in boston industry specula tion is that such technologies may spur higher demand for online advertising but that these technologies will benefit general outlets more than local newspapers 1 it may be problematic for the future of the local news industry if gen eral outlets gain at their expense to date there has been little analysis on how the market for advertising might be impacted by targeting 2 intuition suggests that an outlet

growth speculation and sprawl in a monocentric city abstract an economic theory of sprawl in a growing monocentric city is presented where decision makers have perfect foresight leapfrog development and discontinuous land rent functions may occur and be efficient in both an ex post and ex ante sense where the extent of future growth is uncertain decision makers become speculators and the spatial pattern of development is more complicated ex post inefficiency generally occurs

when to drop a bombshell sender who is either good or bad wishes to look good at an exogenous deadline sender privately observes if and when she can release a public flow of information about her private type releasing information earlier exposes to greater scrutiny but signals credibility in equilibrium bad sender releases information later than good sender we find empirical support for the dynamic predictions of our model using data on the timing of u s presidential scandals and u s initial public offerings in the context of elections our results suggest that october surprises are driven by the strategic behaviour of bad sender

mass media competition political competition and public policy if better informed voters receive favourable policies then mass media will affect policy because mass media provide most of the information people use in voting this paper models the incentives of the media to deliver news to different groups the increasing returns to scale technology and advertising financing of media firms induce them to provide more news to large groups such as taxpayers and dispersed consumer interests and groups that are valuable to advertisers this news bias alters the tradeoff in political competition and therefore introduces a bias in public policy the paper also discusses the effects of broadcast media replacing newspapers as the main information source about politics the model predicts that this change should raise spending on government programmes used by poor and rural voters

crossing takeover premiums and mix of payment an empirical test of contractual setting in m a transactions the analyses of the tender offer premiums and of the means of payment should not be performed separately in the empirical literature these two variables are often considered independently although they may have an endogenous relationship in a contractual setting using a sample of european m as over the 2000 2010 decade we show that these two variables are jointly set in a contractual empirical approach the relationship between the percentage of cash and the offer premium is positive higher premiums yield payments with more cash we highlight that the payment choice is not a continuum between full cash and full share payments two different regimes of payment in m a transactions are empirically characterized we analyze the major determinants of m a terms when the offer premium and the means of payment are jointly set the underlying rationale of an asymmetry of information and a risk sharing calculus is found to be significant in the setting of the agreement

the relative efficiency of taxes in a two period model of urban growth abstract in this paper we investigate the differential effects of a wage tax and a land value tax on urban development and economic efficiency a two period model has been used to confirm that while a land value tax is distortionary a wage tax of equal yield is even worse at the level of a single open city where the supply of labor is perfectly elastic to the city this result suggests that the finding land value taxes are distortionary is of little practical significance

optimal sticky prices under rational inattention this paper presents a model in which price setting firms decide what to pay attention to subject to a constraint on information flow when idiosyncratic conditions are more variable or more important than aggregate conditions firms pay more attention to idiosyncratic conditions than to aggregate conditions when we calibrate the model to match the large average absolute size of price changes observed in micro data prices react fast and by large amounts to idiosyncratic shocks but only slowly and by small amounts to nominal shocks nominal shocks have strong and persistent real effects we use the model to investigate how the optimal allocation of attention and the dynamics of prices depend on the firms environment jel e 3 e5 d8

implications of rational inattention abstract a constraint that actions can depend on observations only through a communication channel with finite shannon capacity is shown to be able to play a role very similar to that of a signal extraction problem or an adjustment cost in standard control problems the resulting theory looks enough like familiar dynamic rational expectations theories to suggest that it might be useful and practical while the implications for policy are different enough to be interesting

can prominence matter even in an almost frictionless market consumer search on the internet is rarely random sponsored links appear higher up a webpage and consumers often click them firms also bid aggressively for these prominent positions at the top of the page but why should prominence matter when visiting an additional website is almost costless i present a model in which consumers know their valuations for the products offered in the market but do not know which retailer sells which product i show that a prominent retailer earns significantly more profit than other firms even when the cost of searching websites and comparing products is essentially zero

competition for attention in the information overload age limited consumer attention limits product market competition prices are stochastically lower the more attention is paid ads compete to be the lowest price in a sector but compete for attention with ads from other sectors equilibrium ad shares follow a ces form when a sector gets more pro table its advertising expands others lose ad market share the information hump shows highest ad levels for intermediate attention levels the information age takes off when the number of viable sectors grows but total ad volume reaches an upper limit overall advertising is excessive though the allocation across sectors is optimal

fox news and political knowledge abstract the effects of partisan media on political knowledge are theoretically ambiguous knowledge effects are important because of their close connection to welfare effects but the existing empirical literature on knowledge is limited we study the knowledge effects of the fox news channel following dellavigna and kaplan 2007 we exploit naturally random variation in fox s availability to identify causal effects we use knowledge survey data from 2000 2004 and 2008 our final sample has nearly one million question level observations we first confirm and expand on previous findings of fox effects on voting we then present an array of results from our knowledge analysis while average effects across issues over the full time frame are near zero and most precise we find evidence of positive effects both for issues that were more favorable to republicans and for issues that fox covered more often and negative effects for issues fox neglected we also present evidence of fox being associated with a decline in newspaper readership