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The strategic timing incentives of commercial radio stations: An empirical analysis using multiple equilibria

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  • Andrew Sweeting

Abstract

Commercial radio stations and advertisers may have conflicting interests about when commercial breaks should be played. This article estimates an incomplete information timing game to examine stations' equilibrium timing incentives. It shows how identification can be aided by the existence of multiple equilibria when appropriate data are available. It finds that stations want to play their commercials at the same time, suggesting that stations' incentives are at least partially aligned with the interests of advertisers, although equilibrium coordination is far from perfect. Coordination incentives are much stronger during drivetime hours, when more listeners switch stations, and in smaller markets. Copyright (c) 2009, RAND.

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  • Andrew Sweeting, 2009. "The strategic timing incentives of commercial radio stations: An empirical analysis using multiple equilibria," RAND Journal of Economics, RAND Corporation, vol. 40(4), pages 710-742.
  • Handle: RePEc:bla:randje:v:40:y:2009:i:4:p:710-742
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    Cited by:

    1. Dirk Bergemann & Stephen Morris, 2013. "Robust Predictions in Games With Incomplete Information," Econometrica, Econometric Society, vol. 81(4), pages 1251-1308, July.
    2. Ron Borkovsky & Paul Ellickson & Brett Gordon & Victor Aguirregabiria & Pedro Gardete & Paul Grieco & Todd Gureckis & Teck-Hua Ho & Laurent Mathevet & Andrew Sweeting, 2015. "Multiplicity of equilibria and information structures in empirical games: challenges and prospects," Marketing Letters, Springer, vol. 26(2), pages 115-125, June.
    3. Dirk Bergemann & Stephen Morris, 2013. "Robust Predictions in Games With Incomplete Information," Econometrica, Econometric Society, pages 1251-1308.
    4. Paul B. Ellickson & Sanjog Misra, 2011. "Structural Workshop Paper --Estimating Discrete Games," Marketing Science, INFORMS, vol. 30(6), pages 997-1010, November.
    5. Haiqing Xu, 2014. "Estimation of discrete games with correlated types," Econometrics Journal, Royal Economic Society, vol. 17(3), pages 241-270, October.
    6. James Bland & Nikos Nikiforakis, 2013. "Tacit Coordination in Games with Third-Party Externalities," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2013_19, Max Planck Institute for Research on Collective Goods.
    7. A. Orhun, 2013. "Spatial differentiation in the supermarket industry: The role of common information," Quantitative Marketing and Economics (QME), Springer, vol. 11(1), pages 3-37, March.
    8. Chen, Chia-Wen, 2014. "Estimating the foreclosure effect of exclusive dealing: Evidence from the entry of specialty beer producers," International Journal of Industrial Organization, Elsevier, pages 47-64.
    9. Ruli Xiao, 2015. "Identification and Estimation of Incomplete Information Games with Multiple Equilibria," Caepr Working Papers 2015-007 Classification-F, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
    10. Dirk Bergemann & Stephen Morris, 2013. "Robust Predictions in Games With Incomplete Information," Econometrica, Econometric Society, pages 1251-1308.
    11. Mian Dai & Xun Tang, 2013. "Regulation and Capacity Competition in Health Care: Evidence from Dialysis Markets," PIER Working Paper Archive 13-057, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    12. Marco Cosconati, 2011. "Parenting Style and the Development of Human Capital in Children," 2011 Meeting Papers 854, Society for Economic Dynamics.
    13. repec:eee:econom:v:201:y:2017:i:2:p:249-268 is not listed on IDEAS
    14. Nianqing Liu & Quang Vuong & Haiqing Xu, 2012. "Rationalization and Identification of Discrete Games with Correlated Types," Department of Economics Working Papers 130915, The University of Texas at Austin, Department of Economics.
    15. Maria Petrova, 2009. "Newspapers and Parties: How Advertising Revenues Created an Independent Press," Working Papers w0131, Center for Economic and Financial Research (CEFIR).

    More about this item

    JEL classification:

    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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