Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92559
Authors: 
Matsubae, Taisuke
Matsushima, Noriaki
Year of Publication: 
2012
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 829
Abstract: 
In Japan, TV platforms regulate themselves as to the length of the advertisements they air. Using modified Hotelling models, we investigate whether such self-regulation improves consumer and social welfare or not. When all consumers choose a single TV program (the utility functions of consumers satisfy the standard 'full-coverage' condition), self-regulation always reduces consumer welfare. It improves social welfare only if the advertisement revenue of each platform is not small and the cost parameter of investments in improving the quality of TV programs is small. When some consumers have outside options (the standard 'full-coverage' condition is not satisfied), self-regulation can benefit consumers because it increases the number of consumers who watch TV programs.
Subjects: 
self-regulation
program quality
advertisement volume
consumer surplus
heterogeneous consumer
JEL: 
L13
L41
L82
Document Type: 
Working Paper

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