the politics and economics of the new media: uncertain impact on democracy (slides)
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Abstract: The development of new interactive and Internet-based media has revolutionized, not only media economics, but also the way we work, study, spend our spare time and participate in politics. The disruptive nature of new information and communication technologies (ICT) calls for an analysis of their impact on politics. In this dissertation I intend to analyze the effects of the new media on democracy. Communication logic and economic analysis are used to understand the effect of ICTs on the world of politics. This study focuses on how new media have changed the economics of journalism and the formation of public opinion, and how these changes affect the politics of democracy. The economic framework of ICTs has created a new kind of media that has changed the way the public accesses, forms and expresses opinion. This phenomenon has the potential to change democracies deeply but due to the existence of different forces tugging at democracy, it is impossible rigorously to predict the result in the long term.Keywords: democracy, new media, media economics, public opinion.TRANSCRIPT
The poli)cs and economics of the new media: uncertain impact on democracy
FACULTY OF ECONOMICS AND ADMINISTRATIVE SCIENCES
DISSERTATION DEFENSE
Madrid. May 2011
Manuel Panizo Vanbossel Supervised by Dr. Pedro Schwartz
Table of Contents
1. Introduc)on 2. New Media Economics
3. Public Opinion 4. ICTs as Helps and Hindrances for Democracy
5. Conclusion
2
Introduc)on
• Conclusion: due to the existence of different forces tugging at democracy, it is not possible to rigorously assess the impact of the new media.
4
New Media Economics
Characteris)cs of the new media Incen)ves to find informa)on, and to form and express opinion
Abundance economics and network effects The digital divide
Social networks and web analy)cs
5
6
Dispersal
Virtuality Interac)vity
Digitality
Mul)media Hypertextuality
New Media Economics Characteris*cs of the new media
New Media Economics
7
Incen*ves to find informa*on, and to form and express opinion
ICTs allow for such low cost, high quality produc)on that many online communicators find incen)ves enough to remain open even when monetary returns are lower than costs.
‘Network effects’: as the number of users of a good or service increases, the more valuable
that good or service becomes.
8
Abundance economics and network effects (1 of 5)
New Media Economics
9
Abundance economics and network effects (2 of 5)
New Media Economics
Marginal u)lity for consumer i (Ui
m) increases as the number of other users (xj) increases.
10
Abundance economics and network effects (3 of 5)
New Media Economics
Demand and supply curves for the new media • Consumers of new media
respond to price changes exactly as any other ra)onal consumer.
• Economies of scale average costs in the long-‐run are decreasing
11
Abundance economics and network effects (4 of 5)
New Media Economics
• Keeping prices constant, an increase in the number of other users shids consumer i’s demand outwards.
• Result: lower prices
Outwards demand shi7 results in lower prices
12
Abundance economics and network effects (5 of 5)
New Media Economics
Decreasing prices in new media industries
In reality, technological improvements have allowed a higher output for given prices, but the demand’s shid has been larger than that of the supply, resul)ng in lower prices.
New Media Economics
‘Digital Divide’ refers to inequali)es in access to ICTs and their social consequences.
13
The digital divide
Source: Internet World Stats 2011 and World Bank 2011, data for 2010.
New Media Economics
14
Social networks and web analy*cs
Web analy)cs: collec)on, processing and analysis of data for understanding and op)mizing website usage.
Social networks: capable of gathering large groups of people on the web and on the streets.
Condorcet’s Jury Theorem 1) The decision of a group is more likely to be correct than the decision of one single person.
2) The competency of the group will increase as the number of competent individuals increases.
17
Why public opinion maJers
Public Opinion
18
• The vote: imperfect cons)tu)onally backed measure of public opinion
• Ra)onal voter hypothesis
Public Opinion Public opinion at the polling sta*on
Hindrances for democracy
• Decline in quality as par)cipa)on increases
• Class filters and biases • Ra)onal voter hypotheses
Helps for democracy
• Low entry costs to the public sphere and dispersal
• Interac)vity and incen)ves • New media offer new tools
for measuring public opinion
• Online vo)ng • Ac)vism
20
ICTs as Helps and Hindrances for Democracy
Conclusion
• Different forces tugging at democracy not possible to rigorously assess the impact of the new media.
• The hindrances cited hint at the issues that must be solved in order to take advantage of the full poten)al that ICTs and new media offer for democracy.
22
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