Abstract
In this paper, we propose a model of competition between a private television channel, financed by advertising, and a public channel, financed by advertising and a transfer of public funds. In this framework, we study the impact of an advertising quota imposed on the public channel on the two channels' investments and on their market shares. We show that the lower the advertising quota, the lower the investments of the two channels, and the lower the audience and the profit of the private channel. We also show that, compared to a benchmark situation without any quota, the introduction of an advertising quota can be to the detriment of the private channel and reduce the viewers' surplus if set at a level too low.
| Translated title of the contribution | The impact of the ban of advertising on public television |
|---|---|
| Original language | French |
| Pages (from-to) | 781-811 |
| Number of pages | 31 |
| Journal | Revue Economique |
| Volume | 62 |
| Issue number | 5 |
| DOIs | |
| Publication status | Published - 11 Nov 2011 |
| Externally published | Yes |