Competition of newspapers and the location of political parties

In this paper we suggest a model for an analysis of how newspapers and political parties determine their ideological orientation and how both decisions depend on each other. Quite naturally dissemination of information plays an important role. The model is set up as a two-stage game. Because elements of horizontal as well as vertical product differentiation are present in this model location patterns in ideology space exhibit in general neither maximal nor minimal differentiation, although we keep quite close to the Downs model, with information as the most important distinguishing feature. Furthermore, the model shows by way of example that economic theory can be a useful tool to investigate issues which are central to communication science.