Prc exists a constant k such that if each ne than k, ne wspapers continue to bias news towards prior s. In this case, agents con tinue to believe in false facts even with an arbitr rge numbers of news-stories Moreover, a newspaper has greater incentive s to spin the story with competition than ThiSPropostion applest storiGSwhe en ew spap e shav eno ideobogy. For &ample newspap esmay hav ehad lttleidelogicalinteestin charac teiz ing wen Ho LeeaSa In thiScasewewoul intepretwhathappenEd aSa pilin then escapes If redesb egan with a modea teprior tha t thechinesear spying on theU.s, then thefirstnewSpape haSan incentive spin thestory in thiSdirec ton. ThiSrGnforces theprior and increasestheincentv eof thene tnew spape t spin itsstory in thesame diretion, futhe r Einforcing thebdlef. Each newspape pileson to thispar tcular Spin making it mor eliel that sucESSivenewspapes follow Suti Unless a newspape reGv eS Somee tently comp elling &idencethatwen Ho LeeiSnota Spy thepiling onr in a vey biasedoltomelg heproposton ako applies to somecases wheenew spap es havean ideology ther eortesthensdk es do no thav eon eand thedditorseeciselttlecontol most notably, on Snake polticalissues een if newSpap e Editor Shav epar cular ideologies EditorSwill no tfind itwor thwhileto contoleactl how each story iSwritten To SUnmarize comp etition do tneescaril renove mEdia biaS If thebiaSis dueto theideobgy of new spap es then incresing thedivest of opinion sget thetuth olt Butif thebiaSiSSpin, the competition only exaggeatesitand k(es The assumption that a storys recall is deter mined by the category after it is read is import ant for this result. If re call were determined solely by the final category (after reading all the news), then newspaper ould not want to cater to priors. Instead they would want to cater to their best guess of the posterior 19These results are analogous to the literature on herding(Banerjee 1992, Bikchandani, Hir shleifer and Welch 1992 and Scharfstein and Stein 1990). An alternative way to gener ate simple herding by newson y is to specify that reporters simply rehash what others have said to save the cost of having to go gener ate new information. While this might be happening, this kind of herding is qualitatively different from that in our mo del. In our model, newspapers are not simply repeating what others have said, they are in fact exagger ating the new news to fit the story Thus in contrast to simple herding explanations, there new"news "pro duced each period; sometimes it is just reported in a way that is biased towards priorsProposition 4 Suppose agents are categorical and newspapers have no ideology. Then there always exists a constant k such that if each newspaper receives news ni smal ler than k, newspapers continue to bias news towards priors. In this case, agents con￾tinue to believe in false facts even with an arbitrarily large numbers of news-stories. Moreover, a newspaper has greater incentives to spin the story with competition than without. This Proposition applies to stories where newspapers have no ideology. For example, newspapers may have had little ideological interest in characterizing Wen Ho Lee as a spy. In this case we would interpret what happened as a piling on by the newspapers. If readers began with a moderate prior that the Chinese are spying on the U.S., then the rst newspaper has an incentive to spin the story in this direction. This reinforces the prior and increases the incentive of the next newspaper to spin its story in the same direction, further reinforcing the belief. Each newspaper piles on to this particular spin, making it more likely that successive newspapers follow suit.18 Unless a newspaper receives some extremely compelling evidence that Wen Ho Lee is not a spy, the piling on results in a very biased outcome.19 The proposition also applies to some cases where newspapers have an ideology if the reporters themselves do not have one and the editors exercise little control. Most notably, on smaller political issues, even if newspaper editors have particular ideologies, editors will not nd it worthwhile to control exactly how each story is written. To summarize, competition does not necessarily remove media bias. If the bias is due to the ideology of newspapers, then increasing the diversity of opinions helps get the truth out. But if the bias is spin, then competition only exaggerates it and keeps 18The assumption that a story's recall is determined by the category after it is read is important for this result. If recall were determined solely by the nal category (after reading all the news), then newspapers would not want to cater to priors. Instead they would want to cater to their best guess of the posteriors that will eventually materialize. 19These results are analogous to the literature on herding (Banerjee 1992, Bikchandani, Hirshleifer and Welch 1992 and Scharfstein and Stein 1990). An alternative way to generate simple herding by newspapers is to specify that reporters simply rehash what others have said to save the cost of having to go out and generate new information. While this might be happening, this kind of herding is qualitatively dierent from that in our model. In our model, newspapers are not simply repeating what others have said, they are in fact exaggerating the new news to t the story. Thus in contrast to simple herding explanations, there is new \news" produced each period; sometimes it is just reported in a way that is biased towards priors. 14