IDEAS home Printed from https://ideas.repec.org/p/uow/depec1/wp12-10.html
   My bibliography  Save this paper

Optimal Control of Broadcasting Spectrum with Variety-Reception Trade-off and Consumers’ Income Sensitivity

Author

Abstract

This paper uses optimal control theory to derive a desirable trajectory of the number of royalties-paying users of state-owned spectrum for broadcasting. The spectrum royalties are set by the public planner to maximize the consumers’ utilities over an infinite planning horizon. The consumers’ utilities are generated from the quality of the service of the broadcasting industry, from the consumption of other goods, and from the public services financed by the spectrum royalties. The number of broadcasters adjusts to above-normal profits. The quality of the broadcasting industry’s service is determined by variety and reception. The trade-off between the benefits from higher variety and royalties’ revenues and the costs of intensified interferences associated with the number of broadcasters is considered. The positive information-dissemination effect and the negative effort-diversion effect of the quality of the broadcasting industry’s service on the consumers’ aggregate income are also considered. The possibility of convergence of the derived trajectory of the number of broadcasters to steady state and the comparative statics of the steady state are analyzed.

Suggested Citation

  • Amnon Levy & Benoît Freyens, 2012. "Optimal Control of Broadcasting Spectrum with Variety-Reception Trade-off and Consumers’ Income Sensitivity," Economics Working Papers wp12-10, School of Economics, University of Wollongong, NSW, Australia.
  • Handle: RePEc:uow:depec1:wp12-10
    as

    Download full text from publisher

    File URL: http://www.uow.edu.au/content/groups/public/@web/@commerce/@econ/documents/web/uow135287.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Massimo Motta & Michele Polo, 1997. "Concentration and public policies in the broadcasting industry: the future of television," Economic Policy, CEPR;CES;MSH, vol. 12(25), pages 293-334, October.
    2. Thomas W. Hazlett, 2008. "Optimal Abolition of FCC Spectrum Allocation," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 103-128, Winter.
    3. Webbink, Douglas W, 1973. "Regulation, Profits and Entry in the Television Broadcasting Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 21(2), pages 167-176, April.
    4. Jérôme Adda & Marco Ottaviani, 2005. "The transition to digital television," Economic Policy, CEPR;CES;MSH, vol. 20(41), pages 160-209, January.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Over-The-Air Broadcasts; Variety; Interferences; Spectrum Royalties; Optimal Control;

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uow:depec1:wp12-10. 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: (Peter Siminski). General contact details of provider: http://edirc.repec.org/data/deuowau.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.