The Impact of an Advertising Quota on Public Television

33 Pages Posted: 9 Oct 2012

See all articles by Marc Bourreau

Marc Bourreau

Telecom ParisTech

Christian Grèce

affiliation not provided to SSRN

Date Written: October 8, 2012

Abstract

In this paper we propose a model of competition between a private television channel, financed by advertising, and a public channel, financed by advertising and a transfer of public funds. We study the impact that an advertising quota imposed on the public channel has on the channels and on the viewers' welfare. We show that, in the short term, when program investments are exogenous, the quota hurts the private channel, but benefits viewers. In the longer term, when program investments are endogenous, the introduction of an advertising quota can benefit the private channel if it is high enough, and reduce the viewers' surplus if set too low.

Keywords: Public television, Advertising quota, Program investments

JEL Classification: L5, L82

Suggested Citation

Bourreau, Marc and Grèce, Christian, The Impact of an Advertising Quota on Public Television (October 8, 2012). Available at SSRN: https://ssrn.com/abstract=2158591 or http://dx.doi.org/10.2139/ssrn.2158591

Marc Bourreau (Contact Author)

Telecom ParisTech ( email )

46, rue Barrault
Paris Cedex 13, F-75634
France

Christian Grèce

affiliation not provided to SSRN ( email )

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