Handbook of Media Economics, vol 1B

potentially damaging news. Capture arises when this attempt is successful. Two factors

make capture harder: media plurality and transaction costs between the government and

the media. Media plurality—namely the existence of a large number of independently

owned outlets—raises the incentive for an individual outlet to publish information that

voters find interesting and hence makes it more difficult for the politician to suppress a

scandal. Transaction costs—akin to the checks and balances mentioned above—reduce

the government’s ability to reward favorable media sources and punish critical ones.

Section 16.3 assumes that transaction costs are so high that the government cannot

bribe and threaten the media. The focus of the analysis shifts to media ...