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Dr. Francesco Sobbrio

IMT Institute for Advanced Studies, Lucca, Italy

Authors: Andrea Blasco, Paolo Pin, and Francesco Sobbrio

Abstract: This paper analyzes a two-sided market for news where advertisers may pay a media outlet to conceal negative information on the quality of their own product (paying positive to avoid negative) and/or to reveal negative information on the quality of their competitors' products (paying positive to go negative). We show that the higher the competition among potential advertisers, the higher the probability that the media outlet fully discloses its information to consumers. Moreover, we analyze the media outlet's endogenous investment in its detection technology and characterize how such investment may differ from the socially optimal one.

Full Text: “Paying Positive to Go Negative: Advertisers' Competition and Media Reports”