This paper by Matthew Gentzkow and Jesse M. Shapiro explores the concept of media bias and its impact on reputation and consumer trust. The authors build a Bayesian model to explain how media firms, motivated by the desire to build a reputation for accuracy, may distort their reports to align with consumers' prior beliefs. They find that bias can emerge even when it makes all market participants worse off, and that bias is less severe when consumers have access to independent evidence or when news outlets are independently owned. The model predicts that competition can reduce bias by increasing the likelihood of ex-post feedback and exposing inaccurate reports. Empirical evidence supports these predictions, showing that feedback limits bias and that competitive markets lead to more equitable reporting. The authors conclude that caution is needed in interpreting media slant as evidence of a preference for confirmatory information, as their model suggests that bias can arise even when consumers only care about learning the truth.This paper by Matthew Gentzkow and Jesse M. Shapiro explores the concept of media bias and its impact on reputation and consumer trust. The authors build a Bayesian model to explain how media firms, motivated by the desire to build a reputation for accuracy, may distort their reports to align with consumers' prior beliefs. They find that bias can emerge even when it makes all market participants worse off, and that bias is less severe when consumers have access to independent evidence or when news outlets are independently owned. The model predicts that competition can reduce bias by increasing the likelihood of ex-post feedback and exposing inaccurate reports. Empirical evidence supports these predictions, showing that feedback limits bias and that competitive markets lead to more equitable reporting. The authors conclude that caution is needed in interpreting media slant as evidence of a preference for confirmatory information, as their model suggests that bias can arise even when consumers only care about learning the truth.