Herd Behaviour and Path Dependence in News Markets: Towards an Economic Theory of Scandal Formation

Abstract

Media phenomena coined as issue attention cycles, media hypes or scandals describe processes in which attention towards issues and news frames converges in news markets. But what drives these processes? This article explores a new theoretical framework, which draws on Economic Theory (i.e., Path Dependence Theory, Principal-Agent Theory, Herd Behaviour Theory and Behavioural Economic Theory), incorporates results from journalism and mass communication research and discusses a process in which journalists and their sources (i.e., whistleblowers, social media users and public relations experts) interact. Specifically, they engage in different types of herd behaviour related to the allocation of attention towards issues and news frames. These self-reinforcing mechanisms then lead to lock-ins-which under certain conditions can be un-locked. JEL: D03, D21, D80, Z00

A network perspective on intermedia agenda-setting

“…There has been extensive research into herd behaviour and interdependence within the fields of behavioural economics and social psychology, in which studies have shown that an individual's bias towards a particular group is a significant contributor towards their social relations (Hogg 2013). This behaviour has also been proposed as a factor in determining how stories are framed in the media (Wilczek 2016).…”

“…The news media is an important information source for much of the world's population, as it feeds into opinions and choices (McCombs and Shaw 1972;McCombs et al 1997;Wilczek 2016). Frequently referred to as the 'gatekeepers of information' , journalists have been shown to play a powerful role in influencing public opinion through determining what stories (or elements thereof ) are presented to the public, how content is framed, which elements are emphasized, and how the public forms associations between topics covered by the news (Guo et al 2012;Wilczek 2016).…”

“…The news media is an important information source for much of the world's population, as it feeds into opinions and choices (McCombs and Shaw 1972;McCombs et al 1997;Wilczek 2016). Frequently referred to as the 'gatekeepers of information' , journalists have been shown to play a powerful role in influencing public opinion through determining what stories (or elements thereof ) are presented to the public, how content is framed, which elements are emphasized, and how the public forms associations between topics covered by the news (Guo et al 2012;Wilczek 2016). While much research has been done on identifying bias in the mainstream media (Wilczek 2016), and has more recently focused on 'fake news' and misinformation (e.g., Vargo et al (2018); Shu et al (2019); Sikder et al (2020)), little research has thus far looked at studying the dynamics underpinning the formation of opinions within the media.…”

The Ethical Algorithm: Journalist/Whistleblower Relationships Explored Through the Lens of Social Exchange

“…Motivations to act may result in unclear risks or benefits to the whistleblower, as altruistic intentions can cloud any risk/benefit analysis judgments. Wilczek (2016) outlined several cognitive processes that may aid in motivating whistleblowers to take action. The availability heuristic, or mental shortcut based on previous knowledge that is recalled when situationally appropriate, according to Wilczek, may simply buttress a whistleblower’s perceptions of wrongdoing and the need to disclose unethical acts.…”

“…For example, seeing similar wrongdoing being reported by journalists may confirm a potential whistleblower’s motivation to disclose, as the observed confirmation is cognitively relevant to the whistleblower. In addition, whistleblowers may be overconfident in their ability to predict the outcomes of their actions, be convinced they remain in control of the situation, believe they have planned their actions satisfactorily, or believe they may receive recognition for their disclosures (Wilczek, 2016, p. 147).…”