Perverse Incentives in Media

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Read what I have to say about perverse incentives here.

With journalism, the internet has created a set of perverse incentives that makes all of our lives a bit more convenient but have had unforeseen political consequences.

Media outlets are paid by the click, and that which goes unclicked goes unseen. Before long, those types of stories are no longer being written. With the unbundling of the variety of stories in a newspaper comes the evisceration of a news team’s budget. Craigslist and Indeed have diverted the ‘Help Wanted’ and ‘Classifieds’ revenue away from newspapers. All of this leaves us more narrowly informed and much more partisan. Ever wonder why national politicians seems to be going crazy? This is a significant contributing factor.

With the incentive structure for online journalism and the unbundling of the subscription model comes the return of some of the worst aspects of Yellow Journalism. The tenants of yellow journalism as laid out by the media historian W.J. Cambell include:

  • Prominent headlines that screamed excitement about ultimately unimportant news
  • Lavish use of pictures (often of little relevance)
  • Impostors, frauds, and fake interviews
  • Ostentatious support for the underdog causes
  • Use of anonymous sources
  • Prominent coverage of high society events

All of those look familiar to me. These are the hallmarks of a media structure that is perversely incentivized to rewards transient sensationalism over farseeing rationality, and frivolous trivia over hard facts.

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