Time scarcity and the market for news

We develop a theory of news coverage in environments of information abundance. Time-constrained consumers browse through news items across competing outlets. They choose which outlets to access and which stories to read or skip, thus indirectly deciding how much time to spend on a given outlet. Firms decide on rankings of news items that maximize their profits. We show that even when readers (or television viewers) and firms are rational and unbiased, they spend more time on the news than they would like and not necessarily on the topics they prefer. In particular, relevant news items may be crowded out. We then study how reader-efficient standards can be restored, and derive implications on diverse aspects of new and traditional media. These include tabloidization and polarization of the news, and other aspects relevant for the political economy of the media, including political knowledge gaps and voter turnout.