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Welfare effects of public service broadcasting in a free-to-air TV market

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  • Rothbauer, Julia
  • Sieg, Gernot

Abstract

Viewer's private information consumption generates external benefits for society, because information improves the ability of voters to control politicians. Our study compares two settings in a free-to-air TV market: a differentiated duopoly of private channels and an oligopoly with both private channels and a public service broadcaster broadcasting information as well as entertainment programs. We find that welfare effects of public service broadcasting depend on its program design and cost efficiency, the external benefits of voter's information, and the magnitude of lost rents from the advertising market.

Suggested Citation

  • Rothbauer, Julia & Sieg, Gernot, 2011. "Welfare effects of public service broadcasting in a free-to-air TV market," MPRA Paper 33779, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:33779
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    References listed on IDEAS

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    1. Gene M. Grossman & Carl Shapiro, 1984. "Informative Advertising with Differentiated Products," Review of Economic Studies, Oxford University Press, vol. 51(1), pages 63-81.
    2. Mark Armstrong & Helen Weeds, 2005. "Public Service Broadcasting in the Digital World," Industrial Organization 0507010, University Library of Munich, Germany.
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    4. 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.
    5. 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.
    6. Julia Rothbauer & Gernot Sieg, 2013. "Public Service Broadcasting of Sport, Shows, and News to Mitigate Rational Ignorance," Journal of Media Economics, Taylor & Francis Journals, vol. 26(1), pages 21-40, March.
    7. Prat, Andrea & Strömberg, David, 2011. "The Political Economy of Mass Media," CEPR Discussion Papers 8246, C.E.P.R. Discussion Papers.
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    9. 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.
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    12. Sara Connolly & Shaun P. Hargreaves Heap, 2007. "Cross Country Differences in Trust in Television and the Governance of Public Broadcasters," Kyklos, Wiley Blackwell, vol. 60(1), pages 3-14, February.
    13. Christine Benesch, 2010. "Governance of Public Broadcasters and Television Consumption," CREMA Working Paper Series 2010-18, Center for Research in Economics, Management and the Arts (CREMA).
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    Cited by:

    1. Julia Rothbauer & Gernot Sieg, 2013. "Public Service Broadcasting of Sport, Shows, and News to Mitigate Rational Ignorance," Journal of Media Economics, Taylor & Francis Journals, vol. 26(1), pages 21-40, March.

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    More about this item

    Keywords

    Media; two-sided TV market; information externalities;
    All these keywords.

    JEL classification:

    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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