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Quality choice and advertising regulation in broadcasting markets

Author

Listed:
  • Francisco Martínez-Sánchez

    (Universidad de Alicante)

  • Miguel González-Maestre

    (Universitat Autònoma de Barcelona)

Abstract

We consider the role of the endogenous choice of platform quality in a broadcasting duopoly market where competing media platforms choose also their level of advertising. We compare the equilibrium levels of quality, advertising and welfare under private and mixed duopoly competition. We show that the welfare comparison between the private and mixed duopoly regimes depends, crucially, on the interplay between the net direct effect of advertising on welfare and the degree of substitutability between platforms. We also consider the effects on quality and welfare of recent policies tending to eliminate advertising as a way of financing publicly-owned platforms.

Suggested Citation

  • Francisco Martínez-Sánchez & Miguel González-Maestre, 2012. "Quality choice and advertising regulation in broadcasting markets," Working Papers. Serie AD 2012-03, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  • Handle: RePEc:ivi:wpasad:2012-03
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    References listed on IDEAS

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    Cited by:

    1. Guillaume Roger, 2017. "Two-sided competition with vertical differentiation," Journal of Economics, Springer, vol. 120(3), pages 193-217, April.
    2. Taisuke Matsubae & Noriaki Matsushima, 2012. "Does Self-regulation of Advertisement Length Improve Consumer Welfare?," ISER Discussion Paper 0829, Institute of Social and Economic Research, Osaka University.

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    More about this item

    Keywords

    endogenous quality; two-sided markets; broadcasting duopoly; publicly-owned platform; advertising regulation.;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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