Viewer Sampling and Quality Signaling in a Television Market
AbstractThis paper analyzes a single television station’s choice of airing tune-ins (preview advertisements). I consider two consecutive programs located along a unit line. Potential viewers know the earlier program but are uncertain about the later one. They may learn it through a tune-in if they watch the earlier program and the television station chooses to air a tune-in, or by directly sampling it for a few minutes. If the sampling cost is sufficiently low, the unique perfect Bayesian equilibrium (PBE) exhibits no tune-ins. Otherwise, the unique PBE involves a tune-in unless the two programs are too dissimilar. When the programs are also quality-differentiated, the willingness to air a tune-in, and thus to disclose location information, may be sufficient to signal high quality without any dissipative advertising.
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Bibliographic InfoPaper provided by The Center for Economic Research and Graduate Education - Economic Institute, Prague in its series CERGE-EI Working Papers with number wp363.
Date of creation: Sep 2008
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Information Disclosure; Tune-ins; Uncertainty; Sampling; Signaling.;
Find related papers by JEL classification:
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
- M37 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Advertising
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