The Market for Internet News Distribution

Orientador(a): Timo Hiller

Co-orientador(a): Leonardo Rezende

This paper studies the role of aggregators as intermediaries in the online news industry. I propose a model where firms must appeal to consumers with differentiated tastes, trading off between a vertical dimension of quality and a horizontal dimension of relevance. In this context, depending on the relative strength of these forces, the presence of the news aggregator may either increase quality and welfare or decrease quality with an ambiguous effect on welfare. I argue that while the first scenario is more in line with the existing theoretical literature on news aggregators, the second seems to be more strongly supported by the empirical evidence. The impact of aggregators in this second scenario may substantiate concerns over the quality of news provision on the internet.