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Are commercial ceilings adequate for the regulation of commercial overload on free-to-air TV channels?


  • Julia Rothbauer

    () (Institute of Transport Economics, Muenster)

  • Gernot Sieg

    () (Institute of Transport Economics, Muenster)


Commercial ceilings not only restrict broadcasters in their decisions about commercial broadcasting time, but also affect their differentiation of program content. This study examines the welfare effects of commercial ceilings in a two-sided free-to-air TV market, taking into account welfare with respect to content differentiation. We identify a second-best commercial ceiling that maximizes welfare in the absence of enforceable program content regulation and identify the situations in which laissez faire is optimal. The deregulation of commercial broadcasting can improve welfare, even if the laissez-faire level of commercial broadcasting time is excessive.

Suggested Citation

  • Julia Rothbauer & Gernot Sieg, 2013. "Are commercial ceilings adequate for the regulation of commercial overload on free-to-air TV channels?," Working Papers 19, Institute of Transport Economics, University of Muenster, revised May 2014.
  • Handle: RePEc:mut:wpaper:19

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    References listed on IDEAS

    1. 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.
    2. 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.
    3. Stühmeier Torben & Wenzel Tobias, 2012. "Regulating Advertising in the Presence of Public Service Broadcasting," Review of Network Economics, De Gruyter, vol. 11(2), pages 1-23, June.
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    More about this item


    advertising regulation; content differentiation; welfare;

    JEL classification:

    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • M38 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Government Policy and Regulation

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