t hought of by readers, and in a psychology-based model of the audience these incentives can produce bias. In the model considered here bias results from the assumed responsibilit ies of the media to serve the public, in t his case by mitigat ing a market failure and a government failu A number of cross-country st udies have been conducted on the influence of the media on politics and the economic performance of count ries. In the realm of private politics Dyck and Zingales(2002) consider the effect of the news media on the behavior of corpo- rat e execut ives and direct ors in choosing " socially responsible"corporate activities. They conclude that the media has subst antial impact on the environment al policies of firms and on governance. In the model present ed here the news media influences the public in both t heir consumpt ion decisions and in their collective choice on regulation Hamilt on(1996) argued t hat television programming exhibits market failures in edu- cational programming for children, public affairs coverage, and indecent and violent pro- gramming. The market failures result in an oversupply of programming with negative externalities and an undersupply of programming with positive externalit ies. He argued for regulat ion to correct the market failures. In the model present ed here the media acts in response to a market failure arising not from wit hin the media market but among the ublic B. Overview of the model The model focuses on the compet ition bet ween activ ists and firms and the role of the ews media in that compet ition. The model describes how the media informs the publ based on informat ion provided by an activist, firms, and possibly its own investigative journalism. The model provides an explanation of media bias as a funct ion of media preferences and the opport unity to influence the public. It also provides an explanation for the communicat ion strat egies of the activist and the firms. Ultimat ely, a theory should ident ify the role of the news media in int erest group compet ition as a private inst itut ion with"officeholders" who self-select into the profession of journalism. The current model provides a first step in that direction At the center of the compet ition bet ween the activist and the firms are a private consumpt ion decision of citizen consumers and a collective choice to regulate the product they consume. The private decision pert ains to a product that has associated wit h it anthought of by readers, and in a psychology-based model of the audience these incentives can produce bias. In the model considered here bias results from the assumed responsibilities of the media to serve the public, in this case by mitigating a market failure and a government failure. A number of cross-country studies have been conducted on the influence of the media on politics and the economic performance of countries. In the realm of private politics Dyck and Zingales (2002) consider the effect of the news media on the behavior of corpo￾rate executives and directors in choosing “socially responsible” corporate activities. They conclude that the media has substantial impact on the environmental policies of firms and on governance. In the model presented here the news media influences the public in both their consumption decisions and in their collective choice on regulation. Hamilton (1996) argued that television programming exhibits market failures in edu￾cational programming for children, public affairs coverage, and indecent and violent pro￾gramming. The market failures result in an oversupply of programming with negative externalities and an undersupply of programming with positive externalities. He argued for regulation to correct the market failures. In the model presented here the media acts in response to a market failure arising not from within the media market but among the public. B. Overview of the Model The model focuses on the competition between activists and firms and the role of the news media in that competition. The model describes how the media informs the public based on information provided by an activist, firms, and possibly its own investigative journalism. The model provides an explanation of media bias as a function of media preferences and the opportunity to influence the public. It also provides an explanation for the communication strategies of the activist and the firms. Ultimately, a theory should identify the role of the news media in interest group competition as a private institution with “officeholders” who self-select into the profession of journalism. The current model provides a first step in that direction. At the center of the competition between the activist and the firms are a private consumption decision of citizen consumers and a collective choice to regulate the product they consume. The private decision pertains to a product that has associated with it an 6