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Comments on Della Vigna and Kennedy

Comments on Della Vigna and Kennedy. Joel Waldfogel Moscow October 28, 2011. Neat paper!. Oodles of evidence trained on question: “does joint ownership of media outlet and movie studio cause better reviews?” “oodles” means N → ∞ Compelling controls, believable estimate Comments

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Comments on Della Vigna and Kennedy

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  1. Comments on Della Vigna and Kennedy Joel Waldfogel Moscow October 28, 2011

  2. Neat paper! • Oodles of evidence trained on question: “does joint ownership of media outlet and movie studio cause better reviews?” • “oodles” means N → ∞ • Compelling controls, believable estimate • Comments • Earnest praise • Finding’s meaning • Effect of “concentration”

  3. Elements of a good story…

  4. villains

  5. heroes • Bias-detecting sleuths

  6. Characters you’re not sure about until the end

  7. Make a wish • Suppose you wanted to know whether films receive better reviews at studio-owned media outlets • Wish list: it would be nice to have a context with • Change in ownership, with reviews before and after • Data on multiple outlets’ reviews of same movies • Half a million observations • Amazingly, this is what Stefano and Alex have!

  8. Drum roll, please • We have countenanced the devil • …and what does he look like?

  9. Regular vs diabolical reviews

  10. Another perspective Answer: 3 points at Fox-owned, 0 at Time Warner, on a mean review of 60

  11. Economic vs statistical significance • N → ∞ • SD of mean: σ/√N • Many things will become statistically significant • Will see *** in tables, but size matters • Aside • Suppose N had been merely 100,000 • Could have convinced me of no effect • Effect is hard to detect

  12. Implications of results • Does ownership affect reviews? • A series of case studies • Yes at Fox, no at Time Warner • Yes for some reviewers, no for others • Would like an explanation of why sometimes yes

  13. What is the policy takeaway? • Don’t let Murdoch own stuff? • or • “on balance, no evidence that it matters much”

  14. Paper Motivation • “Does Media Concentration Lead to Biased Coverage?” • What do you think when you hear “media concentration”?

  15. Possible effects of “concentration” • Product positioning incentives associated with joint ownership • Internalization of business stealing externalities • This paper’s not about that

  16. Competition and product quality? • Does competition keep reviewers honest vs undermining ability to finance high fixed costs • Would require variation in amount of competition • Not what this paper wants to be about

  17. Product positioning and owner preferences • Related to • Podolny and Scott-Morton • what movitates wine makers – “Love or Money?” • Race and ownership • FCC had traditionally tried to promote minority ownership • Maybe change title • “concentration” evokes the wrong imagery here

  18. Another point of contact • This is a merger retrospective • Cf. Ashenfelter, Hosken, etc. • Usually, look at price changes following merger • Selected sample of allowable mergers • Here, merger likely exogenous • Post-merger product repositioning

  19. Thanks • Neat paper! • Impressive exercise • Convincing estimates

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