Opinion Trumps Facts: Entrepreneurship and Competition in Political News
working-paper
Revise & Resubmit, Management Science
Dror Shvadron 
Abstract
Market entry plays a critical role in shaping industries, driving innovation, and introducing new types of products that address unmet needs. New entrants not only compete with incumbent firms but can also compel them to adapt their strategies, creating ripple effects for the industry and society at large. This paper examines how entrepreneurial entrants influence the strategies of incumbents, focusing on the American political news business from 2014 to 2021. We find that new entrants produced news content that was significantly more opinionated than that of incumbents, featuring more editorializing and persuasive language. This increased competition prompted incumbents to adopt similar content strategies. On social media, these shifts triggered more posts containing hate speech and expressions of anger. Yet, this content strategy failed to improve a key performance metric: website traffic. Our findings reveal the unintended consequences of media entrepreneurship. While entrants disrupted the traditional news business by amplifying opinionated content and increasing polarization, they did not deliver better business results.
Revise & Resubmit, Management Science
Citation
@unpublished{ChatterjiEtAl2024Opinion,
title={Opinion Trumps Facts: Entrepreneurship and Competition in Political News},
author={Aaron Chatterji and Sharique Hasan and William D. Miles and Dror Shvadron},
year={2024},
url={https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5121585}
}