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Convergence and the Potential Ban on Interactive Product Placement in Germany

  • Christian Jansen

    (Humboldt-University of Berlin)

This paper addresses the economic impact of German advertising regulations. The digital convergence of media provides a starting point for the analysis. This convergence makes technically feasible “interactive product placement” (IPP), the integration of interactively purchasable products in television programs and movies for the purpose of advertising. Such advertising could conceivably outstrip traditional product placement as a source of revenues for the film industry. Moreover, IPP could provide valuable incentives to create new audiovisual hardware and software. As product placement is generally banned in Germany, we critically review relevant regulations. Additionally, a simple model is developed that allows for a welfare economic approach to the analysis of an IPP ban.

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Paper provided by EconWPA in its series Law and Economics with number 0302002.

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Length: 36 pages
Date of creation: 19 Feb 2003
Date of revision:
Handle: RePEc:wpa:wuwple:0302002
Note: Type of Document - pdf; prepared on PC; pages: 36
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  1. Nichols, Len M, 1985. "Advertising and Economic Welfare," American Economic Review, American Economic Association, vol. 75(1), pages 213-18, March.
  2. Nilssen, T. & Sorgard, L., 2000. "TV Advertising, Programming Investments, and Product-Market Oligopoly," Papers 6/2000, Norwegian School of Economics and Business Administration-.
  3. Milgrom, Paul & Roberts, John, 1986. "Price and Advertising Signals of Product Quality," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 796-821, August.
  4. Jean Gabszewicz & Didier Laussel & Nathalie Sonnac, 1999. "TV-Broadcasting Competition and Advertising," Working Papers 99-72, Centre de Recherche en Economie et Statistique.
  5. Wright, Donald J., 1992. "Television Advertising Regulation And Programme Quality," Working Papers 178, University of Sydney, School of Economics.
  6. repec:tpr:qjecon:v:84:y:1970:i:3:p:488-500 is not listed on IDEAS
  7. Motta, Massimo, 1997. "Advertising Bans," CEPR Discussion Papers 1613, C.E.P.R. Discussion Papers.
  8. Stegeman, Mark, 1991. "Advertising in Competitive Markets," American Economic Review, American Economic Association, vol. 81(1), pages 210-23, March.
  9. Benjamin Klein & Kevin M. Murphy & Lynne Schneider, 1981. "Governmental REgualtion of Cigarette Health Information," UCLA Economics Working Papers 200, UCLA Department of Economics.
  10. Brown, Allan & Cave, Martin, 1992. "The Economics of Television Regulation: A Survey with Application to Australia," The Economic Record, The Economic Society of Australia, vol. 68(203), pages 377-94, December.
  11. De Vany, A. & Walls, W.D., 1999. ""Uncertainty in the Movies: Does Star Power Reduce the Terror of the Box Office?"," Papers 98-99-10, California Irvine - School of Social Sciences.
  12. Simon P. Anderson & Stephen Coate, 2000. "Market Provision of Public Goods: The Case of Broadcasting," NBER Working Papers 7513, National Bureau of Economic Research, Inc.
  13. Grossman, Gene M & Shapiro, Carl, 1984. "Informative Advertising with Differentiated Products," Review of Economic Studies, Wiley Blackwell, vol. 51(1), pages 63-81, January.
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