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Welfare effects of public service broadcasting in a free-to-air TV market

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  • Rothbauer, Julia
  • Sieg, Gernot

Abstract

Viewer's private information consumption generates external benefits for society, because information improves the ability of voters to control politicians. Our study compares two settings in a free-to-air TV market: a differentiated duopoly of private channels and an oligopoly with both private channels and a public service broadcaster broadcasting information as well as entertainment programs. We find that welfare effects of public service broadcasting depend on its program design and cost efficiency, the external benefits of voter's information, and the magnitude of lost rents from the advertising market. --

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Bibliographic Info

Paper provided by Technische Universität Braunschweig, Economics Department in its series Economics Department Working Paper Series with number 13.

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Date of creation: 2011
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Handle: RePEc:zbw:tbswps:13

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Keywords: Media; two-sided TV market; information externalities;

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  1. Stühmeier, Torben & Wenzel, Tobias, 2012. "Regulating advertising in the presence of public service broadcasting," DICE Discussion Papers 41, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  2. Simon P. Anderson & Stephen Coate, 2005. "Market Provision of Broadcasting: A Welfare Analysis," Review of Economic Studies, Oxford University Press, vol. 72(4), pages 947-972.
  3. Sara Connolly & Shaun P. Hargreaves Heap, 2007. "Cross Country Differences in Trust in Television and the Governance of Public Broadcasters," Kyklos, Wiley Blackwell, vol. 60(1), pages 3-14, 02.
  4. Prat, Andrea & Strömberg, David, 2005. "Commercial Television and Voter Information," CEPR Discussion Papers 4989, C.E.P.R. Discussion Papers.
  5. Prat, Andrea & Strömberg, David, 2011. "The Political Economy of Mass Media," CEPR Discussion Papers 8246, C.E.P.R. Discussion Papers.
  6. Christine Benesch, 2010. "Governance of Public Broadcasters and Television Consumption," CREMA Working Paper Series 2010-18, Center for Research in Economics, Management and the Arts (CREMA).
  7. Julia Rothbauer & Gernot Sieg, 2013. "Public Service Broadcasting of Sport, Shows, and News to Mitigate Rational Ignorance," Journal of Media Economics, Taylor & Francis Journals, vol. 26(1), pages 21-40, March.
  8. Grossman, Gene M & Shapiro, Carl, 1984. "Informative Advertising with Differentiated Products," Review of Economic Studies, Wiley Blackwell, vol. 51(1), pages 63-81, January.
  9. Peitz, Martin & Valletti, Tommaso M., 2008. "Content and advertising in the media: Pay-tv versus free-to-air," International Journal of Industrial Organization, Elsevier, vol. 26(4), pages 949-965, July.
  10. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65, pages 135.
  11. Hans Jarle Kind & Tore Nilssen & Lars S�rgard, 2007. "Competition for Viewers and Advertisers in a TV Oligopoly," Journal of Media Economics, Taylor & Francis Journals, vol. 20(3), pages 211-233.
  12. Mark Armstrong & Helen Weeds, 2005. "Public Service Broadcasting in the Digital World," Industrial Organization 0507010, EconWPA.
  13. Jean J. Gabszewicz & Didier Laussel & Nathalie Sonnac, 2004. "Programming and Advertising Competition in the Broadcasting Industry," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 13(4), pages 657-669, December.
  14. Shaun P. Hargreaves Heap, 2005. "Television in a digital age: what role for public service broadcasting?," Economic Policy, CEPR & CES & MSH, vol. 20(41), pages 112-157, 01.
  15. Choi, Jay Pil, 2006. "Broadcast competition and advertising with free entry: Subscription vs. free-to-air," Information Economics and Policy, Elsevier, vol. 18(2), pages 181-196, June.
  16. Mark Armstrong, 2005. "Public service broadcasting," Fiscal Studies, Institute for Fiscal Studies, vol. 26(3), pages 281-299, September.
  17. Jürgen Hagen, 2006. "Introduction," International Tax and Public Finance, Springer, vol. 13(4), pages 301-302, August.
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