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Consider an extreme situation where all the consumers in a given market have the same tastes – for example, with respect to their willingness to pay for newspaper quality or regarding their political preferences.
Then when a new newspaper enters the market, it garners half of the market and halves the incumbent newspaper's circulation.
Moreover, local newspapers remain the most important media when it comes to local news and public affairs.
What are the effects of increased media competition in the local news market?
Given that the number of journalists can be considered as a good proxy for the quality of a newspaper (Angelucci and Cagé 2016), then it implies that competition lowers the quality of information.
Furthermore, I provide additional evidence of this decrease in news quality.
I estimate the effect of newspaper entry by comparing counties that experience entry to similar counties in the same years that do not (in this column, "counties" refer to the 90 of metropolitan France).
Figure 1 shows the number of counties with net newspaper entry for each year (Figure 1a) and the number of counties with net newspaper exits per year (Figure 1b).
Figure 3a Total number of journalists working in the county, 1944–2014 Figure 3b Number of journalists working for the incumbent newspapers, 1944–2014 Hence, under competition, the average size of the newsroom is lower than under monopoly.