That tried-and-true tactic for controlling the flow of information - the embargo - is threatened with extinction. But, for the good of both PR professionals and journalists, embargoes should live on and we can help them survive. Fortunately, game theory gives us insight into why and how that can happen. So let me explain how this might work in our business.
It's no surprise that many media - especially digital outlets - are tempted to break embargoes. The journalist or blogger who is first to market with the story sees more Web traffic and links flow to them. As an unintended consequence, digital communication has created a market for instant information gratification, increasing the reward for outlets that succumb to the temptation to break embargoes and punishing those who play by the rules.
That's why outlets choose to break embargoes. In game theory, they are playing what is known as the dominant strategy and look to capitalize on the short-term benefits of breaking a story. Can you blame them? Not really, because they are acting rationally.
But what if all media act “rationally?” Soon, the information market would reach what economists call a suboptimal equilibrium. It's a race to the bottom with outlets cutting journalistic corners for the sake of speed. You can see this in action in a classic game-theoretic framework called the prisoner's dilemma. In this scenario, two alleged criminals who can't communicate with each other decide independently to betray their accomplice in return for freedom. What's interesting is that prisoners opt to betray each other even though individual rewards would be greater under cooperation.
But take note: Economics tells us that while cooperation is optimal, it's also unsustainable. Fortunately for us, that's where PR firms come in. Correcting "market imperfections" is part of our business. If media play the prisoner's dilemma game again and again, break embargoes and, in a sense, rat each other out, PR firms can reward or punish outlets for cooperating or not. A PR firm can withhold breaking news and encourage clients to establish new media relationships, giving outlets that play by the rules every incentive to cooperate.
The onus is on our firms, not the media, to ensure that information is disseminated with the highest benefits for all market players. Information is a good, and it should be traded according to market principles. The problem is, very few PR firms get that.
Milos Sugovic is a research analyst in Peppercom's Business Intelligence Group.