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Market Provision of Broadcasting: A Welfare Analysis

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  • Simon P. Anderson

    ()

  • Stephen Coate

    ()

Abstract

This paper presents a theory of the market provision of broadcasting and uses it to address the nature of market failure in the industry. Advertising levels may be too low or too high, depending on the nuisance cost to viewers, the substitutability of programs, and the expected benefits to advertisers from contacting viewers. Market provision may allocate too few or too many resources to programming and these resources may be used to produce programs of the wrong type. Monopoly ownership may produce higher social surplus than competitive ownership and the ability to price programming may reduce social surplus.

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File URL: http://www.virginia.edu/economics/RePEc/vir/virpap/papers/virpap358.pdf
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File URL: http://www.virginia.edu/economics/RePEc/vir/virpap/papers/virpap358f.pdf
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Bibliographic Info

Paper provided by University of Virginia, Department of Economics in its series Virginia Economics Online Papers with number 358.

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Length: 41 pages
Date of creation: Sep 2003
Date of revision:
Handle: RePEc:vir:virpap:358

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Web page: http://www.virginia.edu/economics/home.html

Related research

Keywords: public goods; broadcasting; advertising; market failure; two-sided markets;

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References

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  23. Simon P. Anderson & Stephen Coate, 2000. "Market Provision of Public Goods: The Case of Broadcasting," NBER Working Papers 7513, National Bureau of Economic Research, Inc.
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