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Market provision of broadcasting: a welfare analysis. (English) Zbl 1154.91408

Summary: This paper presents a theory of the market provision of broadcasting and uses it to address the nature of market failure in the industry. Equilibrium advertising levels may be too low or too high, depending on the nuisance cost to viewers, the substitutability of programmes, and the expected benefits to advertisers from contacting viewers. The equilibrium amount of programming may also be below or above the socially optimal level. Perhaps surprisingly, the ability to price programming may reduce social surplus, while monopoly ownership may increase it.

MSC:

91B26 Auctions, bargaining, bidding and selling, and other market models
90C90 Applications of mathematical programming
91B18 Public goods
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