Indifferent Public, Passionate Advocates, And Strategic Media

We present a dynamic model of news reporting by a profit-maximizing media outlet whose credibility is uncertain to the public. In each period, the media outlet chooses its source of news: a costly independent investigation or, possibly, a free report prepared by an interest group. The revenue of the media outlet consists of the subscription fees for the public and the access fees for interest groups. We characterize the equilibrium structure of information transmission with and without interest groups. In particular, we demonstrate that the presence of interest groups may enhance the amount of information transmission while decreasing the probability of correct decisions by the public.