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TV-broadcasting competition and advertising

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  • GABSZEWICZ, Jean J.
  • LAUSSEL, Didier
  • SONNAC, Nathalie

Abstract

We analyse the rivalry between two TV-channels competing both on the market for audience and the market for advertising. We identify the nature of TV-programs emerging from this competition, and the quantity of advertising that TV-viewers will have to attend at equilibrium. Finally, we examine how a government's regulation of this quantity will affect programs' selection by the channels.

Suggested Citation

  • GABSZEWICZ, Jean J. & LAUSSEL, Didier & SONNAC, Nathalie, 2000. "TV-broadcasting competition and advertising," LIDAM Discussion Papers CORE 2000006, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2000006
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    References listed on IDEAS

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    1. Jaskold Gabszewicz, J. & Thisse, J. -F., 1979. "Price competition, quality and income disparities," Journal of Economic Theory, Elsevier, vol. 20(3), pages 340-359, June.
    2. GABSZEWICZ, Jean J. & LAUSSEL, Didier & SONNAC, Nathalie, 2000. "Does press advertising foster the “pensée unique”?," LIDAM Discussion Papers CORE 2000008, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    3. Michael Spence & Bruce Owen, 1977. "Television Programming, Monopolistic Competition, and Welfare," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 91(1), pages 103-126.
    4. d'Aspremont, C & Gabszewicz, Jean Jaskold & Thisse, J-F, 1979. "On Hotelling's "Stability in Competition"," Econometrica, Econometric Society, vol. 47(5), pages 1145-1150, September.
    5. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
    6. Greenberg, Edward & Barnett, Harold J, 1971. "TV Program Diversity-New Evidence and Old Theories," American Economic Review, American Economic Association, vol. 61(2), pages 89-93, May.
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    Cited by:

    1. Claude Crampes & Carole Haritchabalet & Bruno Jullien, 2009. "Advertising, Competition And Entry In Media Industries," Journal of Industrial Economics, Wiley Blackwell, vol. 57(1), pages 7-31, March.
    2. Cincera, Michele & Noury, Abdul, 2004. "Monopoly Practises and Competitive Behaviour in the French Satellite Pay-TV Market," CEPR Discussion Papers 4174, C.E.P.R. Discussion Papers.
    3. Anderson, Simon P. & Gabszewicz, Jean J., 2006. "The Media and Advertising: A Tale of Two-Sided Markets," Handbook of the Economics of Art and Culture, in: V.A. Ginsburgh & D. Throsby (ed.), Handbook of the Economics of Art and Culture, edition 1, volume 1, chapter 18, pages 567-614, Elsevier.
    4. Thierry Benoist & Frédéric Gardi & Antoine Jeanjean, 2012. "Lessons Learned from 15 Years of Operations Research for French TV Channel TF1," Interfaces, INFORMS, vol. 42(6), pages 577-584, December.
    5. Brown, Keith & Alexander, Peter J., 2005. "Market structure, viewer welfare, and advertising rates in local broadcast television markets," Economics Letters, Elsevier, vol. 86(3), pages 331-337, March.
    6. Nilssen,T. & Sorgard,L., 2001. "The TV industry : advertising and programming," Memorandum 18/2001, Oslo University, Department of Economics.
    7. Simon P. Anderson & Stephen Coate, 2005. "Market Provision of Broadcasting: A Welfare Analysis," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(4), pages 947-972.
    8. Böhme, Enrico & Müller, Christopher, 2010. "Comparing Monopoly and Duopoly on a Two-Sided Market without Product Differentiation," MPRA Paper 23568, University Library of Munich, Germany.
    9. Barros Pedro P & Kind Hans Jarle & Nilssen Tore & Sørgard Lars, 2005. "Media Competition on the Internet," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-20, January.
    10. Nilssen,T. & Sorgard,L., 2001. "Who are the advertisers?," Memorandum 19/2001, Oslo University, Department of Economics.
    11. Nilssen,T. & Sorgard,L., 2000. "Strategic informative advertising in a TV-advertising duopoly," Memorandum 17/2000, Oslo University, Department of Economics.
    12. Nilssen, Tore & Sørgard, Lars, 2000. "TV Advertising, Program Quality, and Product-Market Oligopoly," Competition Policy Center, Working Paper Series qt2zp943hj, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
    13. Martin Richardson, 2004. "Cultural quotas in broadcasting II: policy," ANU Working Papers in Economics and Econometrics 2004-443, Australian National University, College of Business and Economics, School of Economics.
    14. Mangani, Andrea, 2003. "Profit and audience maximization in broadcasting markets," Information Economics and Policy, Elsevier, vol. 15(3), pages 305-315, September.
    15. Tomáš Kadlec, 2002. "Optimal timing of tv commercials: symmetrical model," Prague Economic Papers, Prague University of Economics and Business, vol. 2002(4), pages 356-369.
    16. Jullien, Bruno, 2008. "Price Skewness and Competition in Multi-Sided Markets," IDEI Working Papers 504, Institut d'Économie Industrielle (IDEI), Toulouse.
    17. Tomas Kadlec, 2002. "Optimal Timing of TV Commercials: Symmetrical Model," CERGE-EI Working Papers wp195, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    18. Feng Zhu, 2008. "Ad-sponsored Business Models and Compatibility Incentives of Social Networks," Working Papers 08-20, NET Institute, revised Sep 2008.
    19. Christian Jansen, 2003. "Convergence and the Potential Ban on Interactive Product Placement in Germany," Law and Economics 0302002, University Library of Munich, Germany.

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