Media Capture and Wealth Concentration

While objective news coverage is vital to democracy, media bias can seriously distort collective decisions. The current paper develops a voting model where citizens are uncertain about the welfare effects induced by alternative policy options and derive information about those effects by the mass media. The media might however secretly collude with interest groups in order to influence the public opinion. In case of voting over the level of a productivity-enhancing public bad, it is shown that an increase in the concentration of financial wealth makes the occurence of media bias more likely. Media bias is not necessarily welfare worsening, but conditions for media bias to increase welfare are restrictive