Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/25907
Authors: 
Kind, Hans Jarle
Nilssen, Tore
Sørgard, Lars
Year of Publication: 
2006
Series/Report no.: 
CESifo working paper 1862
Abstract: 
We consider a model of a TV oligopoly where TV channels transmit advertising and viewers dislike such commercials. We show that advertisers make a lower profit the larger the number of TV channels. If TV channels are sufficiently close substitutes, there will be underprovision of advertising relative to social optimum. We also find that the more viewers dislike ads, the more likely it is that welfare is increasing in the number of advertising financed TV channels. A publicly owned TV channel can partly correct market distortions, in some cases by having a larger amount of advertising than private TV channels. It may even have advertising in cases where advertising is wasteful per se.
JEL: 
L82
M37
Document Type: 
Working Paper

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