The dynamics of television advertising with boundedly rational consumers
The paper adapts a static model of television advertising into a dynamic scenario. In its original form, the model consists on a profit maximization problem of a television network working in a competitive environment. The network sells commercial time to advertisers and tries to minimize the effects of viewers’ aversion to ads. Viewers are assumed heterogeneous with regard to the preferences over the types of products companies sell through ad time. Into this framework we introduce an intertemporal rule reflecting the possible preference changes of consumers (these are boundedly rational and their utility for different types of products varies over time). The introduction of the intertemporal rule originates interesting dynamic results, namely in what concerns the evolution over time of crucial variables like the total time of broadcasting that networks allocate to advertising or the amount of revenues that satisfies the profit maximization condition. As in the original model, attention will be given to the possibility, that cable television allows, of ad addressability.
|Date of creation:||Sep 2006|
|Date of revision:|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- ANDERSON, Simon P. & GABSZEWICZ, Jean J., 2005.
"The media and advertising : a tale of two-sided markets,"
CORE Discussion Papers
2005088, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- 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, Elsevier.
- Simon P., ANDERSON & Jean J., GABSZEWICZ, 2005. "The media and advertising : a table of two-sided markets," Discussion Papers (ECON - Département des Sciences Economiques) 2005060, Université catholique de Louvain, Département des Sciences Economiques.
- ANDERSON, Simon P. & GABSZEWICZ, Jean J., . "The media and advertising: a tale of two-sidedmarkets," CORE Discussion Papers RP 1888, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Anderson, Simon P & Gabszewicz, Jean Jaskold, 2005. "The Media and Advertising: A Tale of Two-Sided Markets," CEPR Discussion Papers 5223, C.E.P.R. Discussion Papers.
- Brock, W.A. & Hommes, C.H., 1996.
"Hetergeneous Beliefs and Routes to Chaos in a Simple Asset Pricing Model,"
9621, Wisconsin Madison - Social Systems.
- Brock, William A. & Hommes, Cars H., 1998. "Heterogeneous beliefs and routes to chaos in a simple asset pricing model," Journal of Economic Dynamics and Control, Elsevier, vol. 22(8-9), pages 1235-1274, August.
- Branch, William A. & Evans, George W., 2010.
"Monetary Policy and Heterogeneous Expectations,"
SIRE Discussion Papers
2010-32, Scottish Institute for Research in Economics (SIRE).
- William A. Branch & George W. Evans, 2010. "Monetary Policy and Heterogeneous Expectations," CDMA Working Paper Series 201011, Centre for Dynamic Macroeconomic Analysis.
- George W. Evans & William A.Branch, 2010. "Monetary Policy and Heterogeneous Expectations," University of Oregon Economics Department Working Papers 2010-4, University of Oregon Economics Department.
- Hirshleifer, David, 2001.
"Investor Psychology and Asset Pricing,"
5300, University Library of Munich, Germany.
- GABSZEWICZ, Jean J. & LAUSSEL, Didier & SONNAC, Nathalie, .
"Programming and advertising competition in the broadcasting industry,"
CORE Discussion Papers RP
1873, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Jean J. Gabszewicz & Didier Laussel & Nathalie Sonnac, 2004. "Programming and Advertising Competition in the Broadcasting Industry," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 13(4), pages 657-669, December.
- Ken Smith, 1999. "Preprints Versus Display Advertising: Which is More Profitable for Nondaily Newspapers?," Journal of Media Economics, Taylor & Francis Journals, vol. 12(4), pages 233-245.
- Leonard Reid & Karen Whitehill King & Hugh Martin & Hyeonjin Soh, 2005. "Local Advertising Decision Makers' Perceptions of Media Effectiveness and Substitutability," Journal of Media Economics, Taylor & Francis Journals, vol. 18(1), pages 35-53.
- 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.
- Peitz, Martin & Valletti, Tommaso, 2004. "Content and Advertising in the Media: Pay-TV versus Free-To-Air," CEPR Discussion Papers 4771, C.E.P.R. Discussion Papers.
- Robert Kieschnick & B. McCullough & Steven Wildman, 2001. "The Market for Television Advertising: Model and Evidence," Review of Marketing Science Working Papers 1-2-1015, Berkeley Electronic Press.
- Walter McDowell & John Sutherland, 2000. "Choice Versus Chance: Using Brand Equity Theory to Explore TV Audience Lead-in Effects, A Case Study," Journal of Media Economics, Taylor & Francis Journals, vol. 13(4), pages 233-247.
- Esteban, Lola & Gil, Agustin & Hernandez, Jose M, 2001. "Informative Advertising and Optimal Targeting in a Monopoly," Journal of Industrial Economics, Wiley Blackwell, vol. 49(2), pages 161-80, June.
- Fare, Rolf & Grosskopf, Shawna & Seldon, Barry J. & Tremblay, Victor J., 2004. "Advertising efficiency and the choice of media mix: a case of beer," International Journal of Industrial Organization, Elsevier, vol. 22(4), pages 503-522, April.
- Nathalie Sonnac, 2000. "Readers’ Attitudes Toward Press Advertising : Are They Ad-Lovers or Ad-Averse ?," Working Papers 2000-28, Centre de Recherche en Economie et Statistique.
- Nathalie Sonnac, 2000. "Readers' Attitudes Toward Press Advertising: Are They Ad-Lovers or Ad-Averse?," Journal of Media Economics, Taylor & Francis Journals, vol. 13(4), pages 249-259.
- Gaunersdorfer, Andrea, 2000. "Endogenous fluctuations in a simple asset pricing model with heterogeneous agents," Journal of Economic Dynamics and Control, Elsevier, vol. 24(5-7), pages 799-831, June.
- Goettler, R., 1999. "Advertising Rates, Audience Composition, and Competition in the Network Television Industry," GSIA Working Papers 1999-28, Carnegie Mellon University, Tepper School of Business.
- Eun-mee Kim & Steven Wildman, 2006. "A Deeper Look at the Economics of Advertiser Support for Television: The Implications of Consumption-Differentiated Viewers and Ad Addressability," Journal of Media Economics, Taylor & Francis Journals, vol. 19(1), pages 55-79.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:2847. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If references are entirely missing, you can add them using this form.