because of how they process informat ion. So for reasons of ideology news out lets may bias informat ion to please their owners, and for reasons of consumer psy chology they may bias the informat ion to please t heir readers These results have significant implicat ions for media accuracy. They explain, particular, how the media in the aggregate are likely to get to the bottom of a news story with significant ideological dimension. Ideological diversity serves as a safeguard against spin. Our results are consistent wit h Richard Posner's(1999)highly favorable assessment of the press in the coverage of the Clinton affair. Our result s also show why media bias is most severe in the cases where no or litt le ideological diversity bears on the story, such as the invest igat ion of Wen Ho Lee. In this case, the bias comes from spin, and spin causes the followers to pile on. Competit ion among media out lets is not a solut ion to the problem of spin- indeed, it makes the problem worse. Our paper makes the case for extreme ideological diversity in the media- in such diversity lies the best he 2 Model setup There are two players: the newspaper and the reader. The newspaper is eit her good or bad A good newspaper has access to some information that the reader wants. A bad newspaper, on the ot her hand, has no useful informat ion. The reader uses the newspaper to improve his estimate of some value t. We begin by assuming that t a single real number. This value could be many things: for example, the quality of a polit ician or the financial health of a firm. The common prior is t NN(0, 0), i.e. t is normally distributed wit h variance o2 There are three periods. In the first period, t he reader receives a signal r about the trut h. This signal reflect s the reader's prejudice about the topic before he reads At a more general level, this paper is part of a broader literature on the interaction between competition and individual psy chology, e.g. Russell and Thaler(1985), De Long et. al.(1990) and Camerer(1998 3For simplicity, we use this terminology of " ne wspaper"and"reader"but nothing we di scuss is specific A A bad newspaper cannot m anufacture stories to appear good. We use the se two ty pes merely as a way to model the incentives of the good newspaper to create memorable stories. If no stories are remembered the newspaper is per ceived to be bad and loses subscribersbecause of how they process information. So for reasons of ideology news outlets may bias information to please their owners, and for reasons of consumer psychology they may bias the information to please their readers. These results have signicant implications for media accuracy. They explain, in particular, how the media in the aggregate are likely to get to the bottom of a news story with signicant ideological dimension. Ideological diversity serves as a safeguard against spin. Our results are consistent with Richard Posner's (1999) highly favorable assessment of the press in the coverage of the Clinton aair. Our results also show why media bias is most severe in the cases where no or little ideological diversity bears on the story, such as the investigation of Wen Ho Lee. In this case, the bias comes from spin, and spin causes the followers to pile on. Competition among media outlets is not a solution to the problem of spin - indeed, it makes the problem worse. Our paper makes the case for extreme ideological diversity in the media - in such diversity lies the best hope against spin.2 2 Model Setup There are two players: the newspaper and the reader.3 The newspaper is either good or bad. A good newspaper has access to some information that the reader wants. A bad newspaper, on the other hand, has no useful information.4 The reader uses the newspaper to improve his estimate of some value t. We begin by assuming that t is a single real number. This value could be many things: for example, the quality of a politician or the nancial health of a rm. The common prior is t  N(0; 2 ), i.e. t is normally distributed with variance 2 . There are three periods. In the rst period, the reader receives a signal r about the truth. This signal re ects the reader's prejudice about the topic before he reads 2At a more general level, this paper is part of a broader literature on the interaction between competition and individual psychology, e.g. Russell and Thaler (1985), De Long et. al. (1990) and Camerer (1998). 3For simplicity, we use this terminology of \newspaper" and \reader" but nothing we discuss is specic to this medium. Our analysis applies to news outlets generally speaking. 4A bad newspaper cannot manufacture stories to appear good. We use these two types merely as a way to model the incentives of the good newspaper to create memorable stories. If no stories are remembered the newspaper is perceived to be bad and loses subscribers. 4