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Programming and advertising competition in the broadcasting industry

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

Abstract

We analyze competition between two private television channels that derive their profits from advertising receipts. These profits are shown to be proportional to total population advertising attendance. The channels play a sequential game in which they first select their profiles (program mixes) and then their advertising ratios. We show that these ratios play the same role as prices in usual horizontal differentiation models. We prove that whenever ads' interruptions are costly for viewers the program mixes of the channels never converge but that the niche strategies are less effective and that the channel "profiles" are closer as advertising aversion becomes stronger. Copyright Blackwell Publishing 2004.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • GABSZEWICZ, Jean J. & LAUSSEL, Didier & SONNAC, Nathalie, 2004. "Programming and advertising competition in the broadcasting industry," CORE Discussion Papers RP 1873, Universit√© catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvrp:1873
    Note: In : Journal of Economics & Management Strategy, 13(4), 657-669, 2004
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    File URL: http://dx.doi.org/10.1016/j.ejor.2007.02.031
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