Interaction between a strategic mass media firm and a government

Abstract

We try to unveil the economic causes behind conflicts arising between Latin American governments and mass media corporations through a theoretical model, which takes into account the fact that Latin American economies tend to be very unstable and the high level of concentration of the mass media markets in the region. The results are not trivial: mass media firms tend to support the Rival rather than the Incumbent when the later is facing a reelection, and the “capture” transfers from the government to the mass media firm will be increasing in the economic instability of the country.