Proposit ion 1 If the newspaper has no ideology (T=0), then it does not manipulat news: v=n. If it has an ideology, then it wants to manipulate news in the direction of its ideology so that sign(v-n)=sign(T). The magnitude of manipulation is increasing in the strength of the ideology (B)and decreasing in the size of the news (nD) and in the cost of manipulation(c(-)) This proposition suggest s one sour ce of bias: the political ideology of the new sp apel But when agents are categorical thinkers, another bias m ay arise. Newspapers m ay ipulate news not because of their political ideology but be cause they cater to readers' interests. The paper wants to have its story remembered and, therefore, may m anipulate new s stories to m ake them more memorable. The following proposition form alizes this notion of spi Proposit ion 2 When the reader is a categorical thinker, the newspaper biases the news even when it has no ideology (T=0). If it biases news, it does so in one of two ways. First, if the news is small enough and inconsistent with priors, it biases the story towards priors. Seoond, if the news is large enough and inconsistent with priors it biases the story away from pr iors in an attempt to change the readers category A simple ex ample illustrates this proposition. Supp ose the reader believes 2 and the newspaper receives a signal -l. Suppose the newspaper reports the truth in this case Since -l is not enough to switch beliefs, the categorical reader continues to believe t+.6 But since the story that the newspaper reported is negative, it contradicts the Bnal category and therefore has a good chance of being forgotten. The new sp aper herefore has an in centive to alter the story to make it positive and thereby more likel b d In other d. the tch the reader's pri But if the signal is large enough, the newspaper m ay want to go against belief g the truth it can change the reader's mind. Once the reader's mind is changed, the 16 And assume for now that the relative variances of noise and signal are equal so that k 11Proposition 1 If the newspaper has no ideology ( = 0), then it does not manipulate news:  = n. If it has an ideology, then it wants to manipulate news in the direction of its ideology so that sign( ￾n) = sign( ). The magnitude of manipulation is increasing in the strength of the ideology () and decreasing in the size of the news (jnj) and in the cost of manipulation (c(
)). This proposition suggests one source of bias: the political ideology of the newspaper. But when agents are categorical thinkers, another bias may arise. Newspapers may manipulate news not because of their political ideology but because they cater to readers' interests. The paper wants to have its story remembered and, therefore, may manipulate news stories to make them more memorable. The following proposition formalizes this notion of spin. Proposition 2 When the reader is a categorical thinker, the newspaper biases the news even when it has no ideology ( = 0). If it biases news, it does so in one of two ways. First, if the news is smal l enough and inconsistent with priors, it biases the story towards priors. Second, if the news is large enough and inconsistent with priors, it biases the story away from priors in an attempt to change the reader's category. A simple example illustrates this proposition. Suppose the reader believes 2 and the newspaper receives a signal ￾1. Suppose the newspaper reports the truth in this case. Since ￾1 is not enough to switch beliefs, the categorical reader continues to believe t+.16 But since the story that the newspaper reported is negative, it contradicts the nal category and therefore has a good chance of being forgotten. The newspaper therefore has an incentive to alter the story to make it positive and thereby more likely to be remembered. In other words, if the news is not enough to change the reader's mind, the paper has an incentive to spin it to match the reader's prior convictions. But if the signal is large enough, the newspaper may want to go against beliefs. In the above example, if the newspaper sees a signal of -3, it knows that by reporting the truth it can change the reader's mind. Once the reader's mind is changed, the 16And assume for now that the relative variances of noise and signal are equal so that k1 = 1 2 . 11