moral suasion can affect n, the news media as well as the activist and the indust ry have incentives to offer moral argument s to persuade consumers to act or not to act privately in the market. Moral suasion is not treat ed as a st rat egy here but inst ead is qualit at ively in Section X D. Media influe Based on their prior informat ion 6=p0H+(1-pOr, citizens with v<u"(s+, 0)do not purchase and prefer regulation s+=s, and those with u2U*(st, 0) purchase and a subset of them, those with vE [ o*(st, 0), vo(s+, 0), prefer regulat ion. Those with higher valuations prefer no regulation. The st atus quo of no regulation is assumed to be the collective choice it h prior information, which requires that v(8, 0)<10 o1 +1)(n+1)ao(1-as) (=n+(+1(-3)-09-2-my) (11) For the media to infuence the collect ive choice, a proport ion y of the public must prefer regulation when the media report s t hat the issue is serious. Letting the mean of the public's post erior beliefs be denot ed by OH when the media report s t hat the issue is serious regulation st=s is preferred if and only if (+1)a(1 7+(7+1) where 8+= s corresponds to 0+= OH. If(11) and(12)are sat isfied, the news media. influences the collective choice when it reports that the issue is serIous, 13 This sit uation is illust rat ed in Figure 3 Vi The News media: Subscribers and sources dit ion for both(11)and(12)to be sat isfied is 7+(n+ 0( S)(OH +0) This is satisfied when 0H>0, which will be the case in equilibrium, and (10) is satisfied formoral suasion can affect η, the news media as well as the activist and the industry have incentives to offer moral arguments to persuade consumers to act or not to act privately in the market. Moral suasion is not treated as a strategy here but instead is considered qualitatively in Section X. D. Media Influence Based on their prior information ¯θ = pθH + (1−p)θL, citizens with v<v∗(s+, ¯θ) do not purchase and prefer regulation s+ = s, and those with v≥v∗(s+, ¯θ) purchase and a subset of them, those with v ∈ [v∗(s+, ¯θ), vo(s+, ¯θ)), prefer regulation. Those with higher valuations prefer no regulation. The status quo of no regulation is assumed to be the collective choice with prior information, which requires that vo(s, ¯θ)<γvˆ or vˆ ￾ γ− 1 n + 1
> ¯θN (n + 1)αvˆ(1 − αs) ￾￾n−η+(n+1)￾ η− 1 N

vˆ(1−αs)−(2−α−s)n¯θηN
. (11) Consequently, s+ = 0 corresponds to θ+ = ¯θ. For the media to influence the collective choice, a proportion γ of the public must prefer regulation when the media reports that the issue is serious. Letting the mean of the public’s posterior beliefs be denoted by ¯θH when the media reports that the issue is serious, regulation s+ = s is preferred if and only if ¯θHN (n + 1)αvˆ(1 − αs) ￾￾n−η+(n+1)￾ η− 1 N

vˆ(1−αs)−(2−α−s)n¯θHηN
≥ ￾ γ− 1 n + 1
v, ˆ (12) where s+ = s corresponds to θ+ = ¯θH. If (11) and (12) are satisfied, the news media influences the collective choice when it reports that the issue is serious.13 This situation is illustrated in Figure 3. VI. The News Media: Subscribers and Sources 13 A necessary and sufficient condition for both (11) and (12) to be satisfied is (¯θH − ¯θ) ￾n − η + (n + 1)￾ η − 1 N

vˆ(1 − αs) − (2 − α − s)(¯θH + ¯θ)nηN > s ￾ n − η + (n + 1)￾ η − 1 N
αvˆ − nηN ¯θH
. This is satisfied when ¯θH>¯θ, which will be the case in equilibrium, and (10) is satisfied for θ+ = θ ¯H+θ ¯ 2 . 16