Royalties, Entry and Spectrum Allocation to Broadcasting
AbstractOptimal control theory is employed to characterize the socially optimal trajectory of the royalty per channel and the number of royalty-paying users of state-owned spectrum for broadcasting. The spectrum royalty is set by an omniscient public planner to maximize the sum of the discounted consumers’ utilities over an infinite planning horizon. The number of broadcasters adjusts over time to profits, while the quality of the industry’s service is determined by variety and reception. The trade-off between the benefits of greater variety and the costs of intensified interferences associated with the number of broadcasters is central to the analysis. The convergence of the socially optimal trajectory of the royalty per channel and the number of broadcasters to a steady state and the comparative statics of the steady state are analyzed.
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Bibliographic InfoPaper provided by School of Economics, University of Wollongong, NSW, Australia in its series Economics Working Papers with number wp13-02.
Length: 23 pages
Date of creation: 2013
Date of revision:
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Postal: School of Economics, University of Wollongong, Northfields Avenue, Wollongong NSW 2522 Australia
Phone: +612 4221-3659
Fax: +612 4221-3725
Web page: http://business.uow.edu.au/econ/index.html
More information through EDIRC
Broadcasting; Royalties; Spectrum; Optimal Control;
Find related papers by JEL classification:
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
- L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-02 (All new papers)
- NEP-COM-2013-10-02 (Industrial Competition)
- NEP-IND-2013-10-02 (Industrial Organization)
- NEP-IPR-2013-10-02 (Intellectual Property Rights)
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