Micro-costs: Inertia in Television Viewing

Authors


  • Corresponding author: Constança Esteves-Sorenson, Yale School of Management, 135 Prospect Street, New Haven, CT 06520, USA. Email: constanca.esteves-sorenson@yale.edu

  • We thank Stefano Della Vigna, Steve Tadelis and Catherine Wolfram for their valuable advice. We also thank Gregorio Caetano, Arthur Campbell, Urmila Chatterjee, Keith Chen, Judy Chevalier, Liran Einav, Pedro Gardete, Jeff Greenbaum, Rachita Gullapalli, Ahmed Khwaja, Botond Kőszegi, Kory Kroft, Rosario Macera, Alex Mas, Amy Nguyen-Chyung, Miguel Palacios, Gisela Rua, Rob Seamans, Olav Sorenson, Betsy Stevenson, Justin Wolfers and participants in the Berkeley Psychology & Economics, Berkeley Haas School of Business, Emory Goizueta Business School, Melbourne Business School, University of Pennsylvania Wharton School, University of Toronto Rotman School of Management and Yale School of Management seminars for valuable suggestions at different stages of this project. We thank Mediaset S.p.A. for generously providing the data for this project.

Abstract

We document substantial default effects despite negligible switching costs in a novel setting: television programme choice in Italy. Despite the low costs of clicking the remote and of searching across only six channels and viewers’ extensive experience with the decision, show choice depends strongly on whether viewers happened to watch the previous programme on the channel. Specifically, male and female viewership of the news depends on whether the preceding programme appealed to men or women, and a show’s audience increases by 2-4% with an increase of 10% in the demand for the preceding programme. These results are robust to endogenous scheduling.

Ancillary