This paper develops a Hotelling location model in which two radio stations choose combinations of local and international content to play, given consumers with preferences distributed over those combinations. Station revenue derives from sales of advertising time, the demand for which depends negatively on the price and positively on the station’s market share and consumers get disutility from advertising and from a less-than-ideal broadcast mix of local and international content. In this setting we show that the laissez-faire solution involves less than (socially optimal) maximal differentiation
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Paper provided by Australian National University, College of Business and Economics, School of Economics in its series ANUCBE School of Economics Working Papers with number
2004-442.
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Find related papers by JEL classification: L59 - Industrial Organization - - Regulation and Industrial Policy - - - Other L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media Z10 - Other Special Topics - - Cultural Economics - - - General
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