That is, in the absence of the media the collective choice is not to regulate, but if the medias report indicat es that the ext ernality is very serious, the collect ive choice is to regu- late. Because of its responsibility to serve cit izen consumers in their private and collective hoices, the news media may have an incent ive to bias its report in the direction of great seriousness of the issue when there is a collective choice failure and t hus lead cit izens to regulate the externality. The news media has an opport unity to bias its report only when it does not have hard information eit her from its sources or its own invest igat ion Figure I illustrat es the model and ident ifies the influences on private and public politics The news media also might be able to affect the privat e decisions of cit izen consumers by causing them to take the ext ernality into account in their consumpt ion decisions. This moral suasion can be a subst it ute for regulat ion C. Results Demand for the firms' product and industry profit are decreasing in cit izen consumers beliefs about the seriousness of the ext ernality and the ext ent to which they int ernalize consumers'valuation for the product, since regu. e support for regulation is decreasing in t ion reduces the value ofthe product. The number of citizens who prefer regulat ion is increasing in the seriousness of the ext ernality but is decreasing in the ext ent to which consumers int emalize the ext ernality. The news report thus can direct ly affect the private decisions of consumers and the indust ry as well as the collect ive choice on regulat ing the externality. The activist and the indust ry may provide hard information to the media, and their communicat ion strategies take the form of advocacy, where the sources present favorable information and may conceal unfavorable information. The medias beliefs that the ext er nality is serious are increasing in the probability that the indust ry conceals unfavorable information and decreasing in the probability that the act ivist conceals unfavorable infor mation. These propert ies carry over to the public's beliefs given a news report that th externality is serious The media reports hard information when it has it, but when it has no hard informa tion, it can bias its report. The incent ive for bias is due to preferences that depend on th aggregate welfare of the public, whereas the collective choice is det ermined by the pivot al voter. This incent ive is only present when the media can influence the collective choice, soThat is, in the absence of the media the collective choice is not to regulate, but if the media’s report indicates that the externality is very serious, the collective choice is to regu￾late. Because of its responsibility to serve citizen consumers in their private and collective choices, the news media may have an incentive to bias its report in the direction of greater seriousness of the issue when there is a collective choice failure and thus lead citizens to regulate the externality. The news media has an opportunity to bias its report only when it does not have hard information, either from its sources or its own investigation. Figure 1 illustrates the model and identifies the influences on private and public politics. The news media also might be able to affect the private decisions of citizen consumers by causing them to take the externality into account in their consumption decisions. This moral suasion can be a substitute for regulation. C. Results Demand for the firms’ product and industry profit are decreasing in citizen consumers’ beliefs about the seriousness of the externality and the extent to which they internalize the externality associated with their purchases. The support for regulation is decreasing in consumers’ valuation for the product, since regulation reduces the value of the product. The number of citizens who prefer regulation is increasing in the seriousness of the externality but is decreasing in the extent to which consumers internalize the externality. The news report thus can directly affect the private decisions of consumers and the industry as well as the collective choice on regulating the externality. The activist and the industry may provide hard information to the media, and their communication strategies take the form of advocacy, where the sources present favorable information and may conceal unfavorable information. The media’s beliefs that the exter￾nality is serious are increasing in the probability that the industry conceals unfavorable information and decreasing in the probability that the activist conceals unfavorable infor￾mation. These properties carry over to the public’s beliefs given a news report that the externality is serious. The media reports hard information when it has it, but when it has no hard informa￾tion, it can bias its report. The incentive for bias is due to preferences that depend on the aggregate welfare of the public, whereas the collective choice is determined by the pivotal voter. This incentive is only present when the media can influence the collective choice, so 8