Advertisement, media bias, political polarisation

When consumers value cognitive consistency between the news they read and policies they support, politicians are induced to make policies that conform to a polarized media landscape which not only depends on user subscription for revenue but also advertisement receipts. Following Guo et. al. (2018), I develop a model to study how the dependency on advertisement revenue affects media bias, political polarisation, and voter preferences. I show that though the equilibrium prices of the two newspapers fall when they depend on advertising receipts, the difference between the equilibrium prices and thus ideological position of a marginal voter remains unchanged, compared to Guo et. Al. (2018). Moreover, the extents of political and media polarisation do not depend on newspapers\u27 dependence on advertisement receipts. I also find that when political parties are not ideologically driven and newspapers have a stronger preference for editorial neutrality, then increase in the public\u27s trust on the newspapers for news consumption leads to increased media and political polarisation