A Theory of Broadcast Media Concentration and Commercial Advertising
Article first published online: 14 SEP 2004
Journal of Public Economic Theory
Volume 6, Issue 4, pages 557–575, October 2004
How to Cite
Cunningham, B. M. and Alexander, P. J. (2004), A Theory of Broadcast Media Concentration and Commercial Advertising. Journal of Public Economic Theory, 6: 557–575. doi: 10.1111/j.1467-9779.2004.00180.x
- Issue published online: 14 SEP 2004
- Article first published online: 14 SEP 2004
- Received February 2004; Accepted May 2004.
We analyze a model in which the interaction of broadcasters, advertisers, and consumers determines the level of nonadvertising broadcasting produced and consumed. Our main finding is that an increase in concentration in broadcast media industries may lead to a decrease in the total amount of nonadvertising broadcasting. The strength of this inverse relationship depends, in part, on the behavioral response of the consumers to changes in advertising intensities. We also present a numerical general equilibrium solution to our model and demonstrate a positive relationship between consumer welfare and the number of firms in the broadcast industry.