| Abstract: |
This paper analyzes a single television station’s choice of airing tune-ins
(preview advertisements). I consider two consecutive programs located along a
unit line. Potential viewers know the earlier program but are uncertain about
the later one. They may learn it through a tune-in if they watch the earlier
program and the television station chooses to air a tune-in, or by directly
sampling it for a few minutes. If the sampling cost is sufficiently low, the
unique perfect Bayesian equilibrium (PBE) exhibits no tune-ins. Otherwise, the
unique PBE involves a tune-in unless the two programs are too dissimilar. When
the programs are also quality-differentiated, the willingness to air a
tune-in, and thus to disclose location information, may be sufficient to
signal high quality without any dissipative advertising. |